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The Employment Guarantee Scheme as a Social Safety Net - Poverty Dynamics and Poverty Alleviation

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  • Katsushi Imai

Abstract

This paper investigates the dynamic aspects of poverty and anti-poverty interventions, particularly focusing on promotional effects, i.e., the effects of helping the poor escape poverty and protective effects, i.e., the effects of preventing the non-poor from slipping into poverty. We test the effectiveness of the Employment Guarantee Scheme (EGS) in rural India as a social safety net drawing upon the ICRISAT survey data. We have carried out the econometric analysis, namely Cox Proportional Hazard Model to estimate the probability of entering or exiting poverty by various covariates drawing upon annual household panel data during the period 1979 to 1984. The following three conclusions have been derived by our estimation results. Firstly, the results suggest that the EGS has significant promotional and protective roles irrespective of the choice of income poverty lines. This is an important finding in the sense that (1) the EGS was effective in reducing poverty in the long run since poverty reduction is achieved through positive promotional and protective roles and (2) the EGS served as insurance for an annual income shortfall. Secondly, we have identified other important factors which prevent households from entering poverty and help them escape poverty, such as decrease in illness of household members, land and access to formal and informal borrowings. Thirdly, we have found that the static determinants of poverty identified by the probit model and `the cause` of poverty estimated by the Cox Model are not much different, implying that static analysis has some implication in identifying the causes of long-term poverty.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 149.

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Date of creation: 01 Mar 2003
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Handle: RePEc:oxf:wpaper:149

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Related research

Keywords: South Asia; India; chronic poverty; Employment Guarantee Scheme; safety net;

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References

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  1. Neil McCulloch & Bob Baulch, 2000. "Simulating the Impact of Policy upon Chronic and Transitory Poverty in Rural Pakistan," Econometrics 0004003, EconWPA.
  2. Jyotsna Jalan & Martin Ravallion, 2000. "Is transient poverty different? Evidence for rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 82-99.
  3. Raghav Gaiha & Katsushi Imai, 2002. "Rural Public Works and Poverty Alleviation--the case of the employment guarantee scheme in Maharashtra," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(2), pages 131-151.
  4. Bliss, Christopher & Stern, Nicholas, 1978. "Productivity, wages and nutrition : Part I: the theory," Journal of Development Economics, Elsevier, vol. 5(4), pages 331-362, December.
  5. Christophe Muller, 1997. "Transient seasonal and chronic poverty of peasants: Evidence from Rwanda," CSAE Working Paper Series 1997-08, Centre for the Study of African Economies, University of Oxford.
  6. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
  7. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
  8. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
  9. Neil McCulloch & Bob Baulch, 2000. "Simulating the impact of policy upon chronic and transitory poverty in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 100-130.
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Cited by:
  1. Barrientos, Armando & Nino-Zarazua, Miguel, 2010. "Social Assistance in Developing Countries Database Version 5.0," MPRA Paper 20001, University Library of Munich, Germany.
  2. R Gaiha & K Imai, 2006. "Vulnerability and poverty in rural India-estimates for rural south India," The School of Economics Discussion Paper Series 0602, Economics, The University of Manchester.
  3. R Gaiha & K Imai, 2005. "A Review of the Employment Guarantee Scheme in India," The School of Economics Discussion Paper Series 0513, Economics, The University of Manchester.

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