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Does India's employment guarantee scheme guarantee employment ?

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  • Dutta, Puja
  • Murgai, Rinku
  • Ravallion., Martin
  • van de Walle, Dominique

Abstract

In 2005 India introduced an ambitious national anti-poverty program, now called the Mahatma Gandhi National Rural Employment Guarantee Scheme. The program offers up to 100 days of unskilled manual labor per year on public works projects for any rural household member who wants such work at the stipulated minimum wage rate. The aim is to dramatically reduce poverty by providing extra earnings for poor families, as well as empowerment and insurance. If the program worked in practice the way it is designed, then anyone who wanted work on the scheme would get it. However, analysis of data from India's National Sample Survey for 2009/10 reveals considerable un-met demand for work in all states. The authors confirm expectations that poorer families tend to have more demand for work on the scheme, and that (despite the un-met demand) the self-targeting mechanism allows it to reach relatively poor families and backward castes. The extent of the un-met demand is greater in the poorest states -- ironically where the scheme is needed most. Labor-market responses to the scheme are likely to be weak. The scheme is attracting poor women into the workforce, although the local-level rationing processes favor men.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6003.

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Date of creation: 01 Mar 2012
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Handle: RePEc:wbk:wbrwps:6003

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Keywords: Rural Poverty Reduction; Labor Markets; Services&Transfers to Poor; Poverty Monitoring&Analysis;

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References

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  1. Michael Lokshin, 2006. "Difference-based semiparametric estimation of partial linear regression models," Stata Journal, StataCorp LP, StataCorp LP, vol. 6(3), pages 377-383, September.
  2. Datt, Gaurav & Ravallion, Martin, 1994. "Transfer Benefits from Public-Works Employment: Evidence for Rural India," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(427), pages 1346-69, November.
  3. Basu, Arnab K. & Chau, Nancy H. & Kanbur, Ravi, 2006. "A Theory of Employment Guarantees: Contestability, Credibility and Distributional Concerns," Working Papers, Cornell University, Department of Applied Economics and Management 127048, Cornell University, Department of Applied Economics and Management.
  4. 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, Elsevier, vol. 20(4), pages 456-464, September.
  5. Ravallion, Martin & Datt, Gaurav & Chaudhuri, Shubham, 1993. "Does Maharashtra's Employment Guarantee Scheme Guarantee Employment? Effects of the 1988 Wage Increase," Economic Development and Cultural Change, University of Chicago Press, vol. 41(2), pages 251-75, January.
  6. Ravallion, Martin, 1990. "On the coverage of public employment schemes for poverty alleviation," Journal of Development Economics, Elsevier, Elsevier, vol. 34(1-2), pages 57-79, November.
  7. Basu, Arnab K., 2011. "Impact of Rural Employment Guarantee Schemes on Seasonal Labor Markets: Optimum Compensation and Workers' Welfare," IZA Discussion Papers 5701, Institute for the Study of Labor (IZA).
  8. Liu, Yanyan & Deininger, Klaus W., 2010. "Poverty Impacts of India's National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado, Agricultural and Applied Economics Association 62185, Agricultural and Applied Economics Association.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. On the difficulty of implementing right-to-work legislation
    by Economic Logician in Economic Logic on 2012-04-10 14:47:00
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Cited by:
  1. Imbert, Clément, 2013. "Travailler pour être aidé? L’emploi garanti en Inde," Opuscules du CEPREMAP, CEPREMAP, CEPREMAP, number 33, May.

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