By M. Chatib Basri, Rema N. Hanna and Benjamin A. Olken
CID Core Faculty and EPoD Faculty Director Rema Hanna coauthored an article for the Jakarta Post on April 16, 2020. The authors give insight on how governments can expand social protections beyond their "typical" reach. They provide three direct suggestions for the government in Indonesia to increase protections for the middle class.
Many of the government’s “typical” social protection programs, such as the PKH and Sembako Program, are geared toward the poor. Targeting in these programs is based on a household’s assets. This makes sense for antipoverty programs – these assets reflect long-term poverty well.
But, these programs miss workers who have recently been hit with a major shock, such as lost wages or lost income from business. In fact, many lower-middle class workers were gainfully employed just a month ago but now have no income. Many do not have enough savings to get by if they lose their income.