CBE Faculty Published in Applied Economics Journal

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YEREVAN, Armenia — The Manoogian Simone College of Business and Economics (CBE) at the American University of Armenia (AUA) is pleased to announce a new publication in Applied Economics from AUA Adjunct Associate Professor and Invited Scholar at SKEMA Business School Dr. Aleksandr Grigoryan and CBE Associate Professor and Vice Provost for Integration Dr. Knar Khachatryan, in collaboration with Dr. Pundarik Mukhopadhaya from Macquarie University in Australia. The study, titled “Effectiveness of the main national pro-poor targeted program in Armenia: evidence from the period 2004–2018,” was conceived with the support of the Center for the Promotion of Economic Education and Research foundation of the Central Bank of Armenia. 

Using the Armenian Household Survey data for 2004–18, the study explores the causal effect of family benefits, the country’s main poverty targeted program, on multidimensional and monetary poverty. The authors find that only 40% of the total fund of this targeted program reached the severe multidimensional poor households. The regression estimation based on bias-corrected dynamic panel data models revealed that an increase in the proportion of households receiving family benefits mostly resulted in a decrease in the incidence of severe multidimensional poverty. However, it had no significant effect on moderately poor households and those who are vulnerable to poverty. 

The program significantly benefited only those households who were poor in terms of their health expenditure. The authors further observed that the impact of these benefits was significant on the extreme monetary poor, but the effect was inconclusive on those who lived below the national upper poverty line. The study’s findings suggest that in the country’s current development stage, targeted poverty programs should focus on enhancing capabilities and human capital development. Additionally, in order to address the social assistance coverage gap, the government needs to enhance incentive mechanisms for the main actors in the social protection system.

The study contributes to the existing literature in two ways. As the authors state: “Firstly, since poverty is not confined to money metrics alone, we examine the efficiency of targeted welfare programs from multidimensional poverty and monetary poverty perspectives. Our study focuses on the post-reform outcomes and provides insight into policy improvement directions. Secondly, our study is the first to explore the issue of a post-Soviet economy. An examination of poverty-targeted programs in such economies is important, since they carry the heavy legacy of a centrally planned economy in designing and implementing public programs.”

Founded in 1991, the American University of Armenia (AUA) is a private, independent university located in Yerevan, Armenia, affiliated with the University of California, and accredited by the WASC Senior College and University Commission in the United States. AUA provides local and international students with Western-style education through top-quality undergraduate and graduate degree and certificate programs, promotes research and innovation, encourages civic engagement and community service, and fosters democratic values.