A quantitative analysis of employment guarantee programmes with an application to rural India
AbstractThis paper examines the welfare effects of a workfare programme in an economy where agents face exogenous income shocks and are unable to insure themselves through private markets. A dynamic general equilibrium model is calibrated using data from two ICRISAT villages in the Indian state of Maharashtra, which had a functioning Employment Guarantee Scheme (EGS), in the period 1979-84. The optimal wage and the welfare gains of the program depend on how productive the EGS is, relative to the private sector. When agents are paid the optimal wage rate, they do not hold the non-interest-bearing asset for precautionary savings and all insurance is provided by the EGS. There are significant welfare gains from paying the optimal wage rate as opposed to simply paying the marginal product of labour in the EGS.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 10 (2001)
Issue (Month): 2 ()
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Other versions of this item:
- Pushkar Maitra, . "A Quantitative Analysis of Employment Guarantee Programs with an Application to Rural India," Computing in Economics and Finance 1997 84, Society for Computational Economics.
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