Social transfers and poverty alleviation in Taiwan from 2000 to 2020

Abstract This study explored the effectiveness of government social transfers in alleviating poverty and investigated the profile and reduction of income poverty in Taiwan before and after these transfers by using the Foster–Greer–Thorbecke (FGT) class of poverty measures. Data were obtained from the 2000–2020 Survey of Family Income and Expenditure. Significant progress was made in reducing poverty over the study period. The three FGT poverty measures before and after transfers peaked in 2009 and 2010, respectively, during the global financial crisis. The findings also suggested that poverty varied considerably across the subgroups. Poverty was more prevalent in female‐headed and older adult‐headed households than in male‐headed and younger adult‐headed households before and after transfers. However, the degree of poverty reduction was greater in female‐headed and older adult–headed households, and these households made greater contributions to overall poverty over time. In addition, heterogeneity was identified among the household types, and grandparent, couple, and single‐person households were identified as the most disadvantaged groups. The high number of means‐tested programs suggests piecemeal welfare benefits in Taiwan. The people living in poverty in our study relied considerably on various social transfers. Accordingly, integrated and universal welfare programs should become a key focus of policy.