Resource information
In 1993, in response to persistent
unemployment, and rising poverty and social unrest, the
government of Albania introduced an anti-poverty program,
namely Ndihma Ekonomike; in 1995 it was extended to all poor
households. This paper estimates the separate effects of
participation in this income support program and the old-age
pension program on objective and subjective measures of
household poverty. The analysis uses the nationally
representative Albanian Living Standards Measurement Surveys
carried out in 2002 and 2005. Using propensity score
matching methods, the paper finds that Ndihma Ekonomike
households, particularly urban residents, have lower per
capita consumption and are more likely to be discontented
with their lives, financial situation, and consumption
levels than their matched comparators. In contrast,
households receiving pensions are not significantly
different from their matched comparators in reference to the
same set of outcomes. The paper finds that the negative
impact of Ndihma Ekonomike participation on welfare is
driven by a negative labor supply response among
work-eligible individuals. This negative labor response is
larger among women and urban residents. In contrast to
Ndihma Ekonomike, the receipt of old-age pension income
transfers does not significantly impact the labor supply of
prime-age individuals living in pension households
