Protecting the Vulnerable

• Tác giả: William Jack
• Ngôn ngữ: eng
• Ký hiệu phân loại: 337.3 International economics
• Thông tin xuất bản: World Bank, 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 309456
• Chủ đề: 1. crowding; 2. ECONOMIC REVIEW; 3. expenditures; 4. insurance market; 5. low income

Tóm tắt

In a risky world should governments provide public goods that reduce risk or compensate the victims of bad outcomes through social insurance? This article examines a basic question in designing social protection policies: how should a government allocate a fixed budget between these two activities? In the presence of income and risk heterogeneities a simple public insurance scheme that pays a fixed benefit to all households that suffer a negative shock is an effective redistributional instrument of public policy. This is true even when a well functioning private insurance market exists, and so the role of public insurance is not to correct a market failure. In fact, the existence of a private insurance market means that the public system has desirable targeting properties-all but the poor and high-risk take up private insurance. The provision of public goods that reduce risk for all should therefore be complemented with public insurance that (automatically) benefits those who are especially vulnerable.