Chetty and Looney assess the potential welfare gain from introducing social safety nets in developing economies.

• Position: Conferences

Chetty and Looney assess the potential welfare gain from introducing social safety nets in developing economies. Using panel surveys of households in Indonesia and the United States, they find that food consumption falls by approximately 10 percent when individuals become unemployed in both countries. This finding is surprising given that the United States has an extensive social safety net while Indonesia has virtually none. Prior studies have interpreted such results as evidence that social insurance is of limited value in developing...