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Net transfer benefits under India's rural employment guarantee scheme

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  • Jha, Raghbendra
  • Gaiha, Raghav
  • Pandey, Manoj K.

Abstract

This paper explores the important but relatively neglected issue of real income transfers, net of the opportunity cost of time, under India's National Rural Employment Guarantee Scheme. We use representative household level primary data for three states, Rajasthan, Andhra Pradesh and Maharashtra to depict various individual and social characteristics of the population in these states as well as those of the participants in the NREGS. We also model the stochastic dominance comparisons of per capita monthly expenditures of participants with and without alternative employment opportunities in the absence of NREG as well as the determinants of such opportunities. As an approximate measure of the net transfer benefits under NREGS, we consider shares of NREG earnings net of the opportunity cost of time in household income. The distribution of such net transfers across household characteristics as well as the distribution of benefits across villages in the three states is also discussed. In general, net transfers under the NREGS are quite modest. Why accurate measurement of such transfers matters in an anti-poverty strategy is elaborated.

Suggested Citation

  • Jha, Raghbendra & Gaiha, Raghav & Pandey, Manoj K., 2012. "Net transfer benefits under India's rural employment guarantee scheme," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 296-311.
    • Handle: RePEc:eee:jpolmo:v:34:y:2012:i:2:p:296-311
    DOI: 10.1016/j.jpolmod.2011.04.001
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    References listed on IDEAS

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    1. Datt, Gaurav & Ravallion, Martin, 1994. "Transfer Benefits from Public-Works Employment: Evidence for Rural India," Economic Journal, Royal Economic Society, vol. 104(427), pages 1346-1369, November.
    2. Martin Ravallion & Gaurav Datt, 1995. "Is Targeting Through a Work Requirement Efficient? Some Evidence for Rural India," Monash Economics Working Papers archive-41, Monash University, Department of Economics.
    3. Subramanian, Shankar & Deaton, Angus, 1996. "The Demand for Food and Calories," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 133-162, February.
    4. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
    5. Jha, Raghbendra & Bhattacharyya, Sambit & Gaiha, Raghav & Shankar, Shylashri, 2009. ""Capture" of anti-poverty programs: An analysis of the National Rural Employment Guarantee Program in India," Journal of Asian Economics, Elsevier, vol. 20(4), pages 456-464, September.
    6. Jha, Raghbendra & Bhattacharyya, Sambit & Gaiha, Raghav, 2011. "Social safety nets and nutrient deprivation: An analysis of the National Rural Employment Guarantee Program and the Public Distribution System in India," Journal of Asian Economics, Elsevier, vol. 22(2), pages 189-201, April.
    7. Jha, Raghbendra & Gaiha, Raghav & Sharma, Anurag, 2009. "Calorie and Micronutrient Deprivation and Poverty Nutrition Traps in Rural India," World Development, Elsevier, vol. 37(5), pages 982-991, May.
    8. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657, Elsevier.
    9. Ravallion, Martin, 1999. "Appraising Workfare," The World Bank Research Observer, World Bank, vol. 14(1), pages 31-48, February.
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    Cited by:

    1. Ravallion, Martin, 2019. "Guaranteed employment or guaranteed income?," World Development, Elsevier, vol. 115(C), pages 209-221.
    2. Asian Development Bank (ADB), 2013. "Empowerment and Public Service Delivery in Developing Asia and the Pacific," ADB Reports RPT135565-3, Asian Development Bank (ADB), revised 15 May 2013.
    3. Esther Gehrke, 2019. "An Employment Guarantee as Risk Insurance? Assessing the Effects of the NREGS on Agricultural Production Decisions," The World Bank Economic Review, World Bank, vol. 33(2), pages 413-435.
    4. Arthur Alik-Lagrange & Martin Ravallion, 2015. "Inconsistent Policy Evaluation: A Case Study for a Large Workfare Program," NBER Working Papers 21041, National Bureau of Economic Research, Inc.
    5. Rinku Murgai & Martin Ravallion & Dominique van de Walle, 2016. "Is Workfare Cost-effective against Poverty in a Poor Labor-Surplus Economy?," The World Bank Economic Review, World Bank, vol. 30(3), pages 413-445.
    6. Alik-Lagrange, Arthur & Ravallion, Martin, 2018. "Workfare versus transfers in rural India," World Development, Elsevier, vol. 112(C), pages 244-258.
    7. Lagrange, Arthur Alik & Ravallion, Martin, 2012. "Evaluating workfare when the work is unpleasant : evidence for India's national rural employment guarantee scheme," Policy Research Working Paper Series 6272, The World Bank.
    8. Martin Ravallion, 2019. "Is a Decentralized Right-to-Work Policy Feasible?," NBER Working Papers 25687, National Bureau of Economic Research, Inc.
    9. Martin Ravallion, 2013. "The Idea of Antipoverty Policy," NBER Working Papers 19210, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    NREG; Net Transfer benefit; Stochastic dominance;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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