Whose Right Is It Anyway? Welfare Implications of Food Security Programs

Governments worldwide implement food security programs to combat malnutrition, but there is a debate about which implementation strategy is more effective in developing countries: a universal approach, under which households of all income categories have access to the benefits of the program, or a targeted approach, under which only poor households are eligible. I address this question in the context of the world’s largest food security program, the Indian Public Distribution System (PDS). The PDS provides grains at highly subsidized rates to the poor, and the extent of targeting differs from state to state within India. This provides an ideal quasiexperimental setting in South India to analyze the impact of universal versus targeted food security programs on vulnerability to poverty using a geographic regression discontinuity design. I use household survey data from the India Human Development Survey-II (IHDS II), 2011-12, for the empirical analysis. The results indicate that a more universal approach to food security is more successful in poverty reduction, and the effects are greater for the most marginalized groups. Households use the subsidy from the PDS to make various types of risk averse investments, all of which protect them in contingencies and reduce their vulnerability to poverty. They also increase their labor supply in their primary occupation and reduce the number of casual jobs they take up, thereby reducing variability in income and making them less vulnerable to poverty. These results indicate, that not only are food security measures sufficient for poverty alleviation, but a more universal approach is more effective, at least in the context of developing countries like India. JEL: H53, I32, I38, J22, J28