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Targeting versus Universalism: An Evaluation of Indirect Effects of the Employment Guarantee Scheme in India

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Abstract

Although a workfare scheme is potentially a cost-effective poverty alleviation scheme as it attracts only the poor who have an incentive to do unskilled manual works, an investigation of the ICRISAT data in India clarifies that the Employment Guarantee Scheme was mistargeted, i.e., a substantial share of the non-poor also participated. The comparison of the EGS and universalism through the villagelevel SAM (Social Accounting Matrix) model reveals that the former is neither efficient nor equitable than the latter unless the state government carefully designs the scheme so that the EGS assets, such as irrigation facilities, are made accessible to the poor without undermining their positive effects on agricultural productivity.

Suggested Citation

  • Katsushi Imai, 2004. "Targeting versus Universalism: An Evaluation of Indirect Effects of the Employment Guarantee Scheme in India," Royal Holloway, University of London: Discussion Papers in Economics 04/07, Department of Economics, Royal Holloway University of London, revised Jun 2004.
    • Handle: RePEc:hol:holodi:0407
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    2. D’Alessandro, Simone & Distefano, Tiziano & Spinato Morlin, Guilherme & Villani, Davide, 2025. "Exploring policy responses to labour-saving technologies: An assessment of basic income, job guarantee, and working time reduction," Journal of Policy Modeling, Elsevier, vol. 47(1), pages 49-63.
    3. Laura Camfield, 2014. "Growing Up in Ethiopia and Andhra Pradesh: The Impact of Social Protection Schemes on Girls’ Roles and Responsibilities," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 26(1), pages 107-123, January.
    4. Dey, S., 2010. "Evaluating India's national rural employment guarantee scheme," ISS Working Papers - General Series 18703, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Bannò, Mariasole & Sgobbi, Francesca, 2010. "Firm participation in financial incentive programmes: The case of subsidies for outward internationalisation," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 792-803, November.
    6. Sarabjeet D. Natesan & Rahul R. Marathe, 2021. "MGNREGA Implementation in Tamil Nadu: Voices from the fields," Indian Journal of Human Development, , vol. 15(1), pages 128-137, April.

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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