Are private transfers crowded out by public transfers? The case of Nepal

Research output: Contribution to journalArticle

Abstract

Using household data from Nepal for 1995/96, this paper investigates the motives underlying private transfers and examines whether or not public transfers crowded out private transfers and the resultant effects on income inequality. The estimation results of Probit and Tobit models show that the private transfers received were altruistically motivated while public transfers exerted no crowding-out effect. Although the probability of receiving private transfers decreases with household size, having more children or more elderly members of the family increases the probability as well as the amount of transfers. By contrast, the age of the household head does not appear to be a significant factor. Furthermore, the study shows that public transfers did not contribute to a lowering of income inequalities among households. These findings suggest that the Government of Nepal should design its public transfer schemes in order to improve the effectiveness and efficiency of its social safety net programs.

Original languageEnglish
Pages (from-to)510-528
Number of pages19
JournalDeveloping Economies
Volume42
Issue number4
Publication statusPublished - 2004 Dec 1

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Nepal
income
safety
crowding out
household
public
Public transfers
Private transfers
household size
difference in income
Household
effect
Income inequality
efficiency

Keywords

  • Crowding-out
  • Nepal
  • Private transfers

ASJC Scopus subject areas

  • Economics and Econometrics
  • Development

Cite this

Are private transfers crowded out by public transfers? The case of Nepal. / Kang, Sung Jin.

In: Developing Economies, Vol. 42, No. 4, 01.12.2004, p. 510-528.

Research output: Contribution to journalArticle

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