IMPACT OF SOCIAL SAFETY NETS ON AN INDIVIDUAL’S BEHAVIOUR: AN EMPIRICAL STUDY OF RURAL PAKISTAN

Abstract

This dissertation investigates the impact of Social Safety Nets (SSN) on the behavioural aspects of households, namely, their aspirations levels and the level of confidence these households have in their government. We conduct this research for rural Pakistan by using the cross-sectional micro data from Pakistan Rural Panel Household Survey (Round 1) conducted in year 2011-2012 by International Food Policy and Research Institute (IFPRI). We argue that in order to increase the efficiency of SSNs, policy design must take into account the behavioural aspects if SSNs are to be successful in helping poor escape poverty. Propensity Score Matching (PSM) was to obtain the counterfactual or control group. The impact of SSNs on our two outcome variables i.e. household aspirations level and government confidence level was then calculated by Average Treatment Effect on the Treated (ATT). In order to measure aspirations levels we constructed two aspirations indices that capture aspirations across four dimensions and one index for government confidence level which also uses four dimensions. Our results show, SSNs have a positive impact on household aspirations levels and no effect on their level of confidence in government. Keywords: Social Safety Nets, Aspirations Levels, Government Confidence Level, Propensity Score Matching, Average Treatment Effect on Treated, Pakistan