Special Employment Programs and Poverty Alleviation

This paper argues that the two main poverty alleviation strategies used in many developing countries—wage employment creation via rural public work or self-employment creation via provision of subsidized credit for purchasing assets—are complementary to each other. Social infrastructure created by wage employment schemes can doubly augment incomes of the poor if the latter have access to credit and working capital that enables them to take advantage of the social infrastructure they help create. Of course, wage employment schemes are an important source of employment and income to the poor during times of adversity, such as droughts, crop failures and lean seasons. However, the important policy question often is not whether special employment programs reduce the incidence, depth, and severity of poverty, but whether the poverty reduction obtained on account of these programs is greater than it would have been under some alternative intervention of equal or lower cost. Growth in agricultural productivity remains the most sustainable and effective way of alleviating rural poverty in the long run.