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Welfare Dependence and Poverty Traps

Welfare Dependence and Poverty Traps: Evaluating the contribution of health shocks and health policy using administrative data

Principal Investigator: Professor Sonia Bhalotra, University of Essex

The objective is to investigate the extent to which public health provision enhances the capacity for social protection. The poor are more vulnerable to disease, and poor health can perpetuate poverty and welfare dependency. We will contribute new evidence on synergies between income support and public health, relevant to sustaining cash transfers on a wide scale, especially under austerity. We also contribute to work on sustainable cities insofar as we study epidemics that diffuse more rapidly in dense urban areas. Previous attempts to identify causal effects of health on poverty have been frustrated by the poor being more likely to suffer health shocks, making it hard to isolate cause from effect. We will address this challenge by analysing administrative individual longitudinal data on the entire population of welfare recipients in Brazil, linked to hospital, clinic and vital statistics data, and using exogenous variation in local epidemic infection rates.

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