Does India's employment guarantee scheme guarantee employment ?
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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- Basu, Arnab K., 2011.
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"A Theory of Employment Guarantees: Contestability, Credibility and Distributional Concerns,"
IZA Discussion Papers
3002, Institute for the Study of Labor (IZA).
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- Klaus Deininger & Yanyan Liu, 2013.
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- 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.
- 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, vol. 20(4), pages 456-464, September.
- Raghbendra Jha & Sambit Bhattacharyya & Raghav Gaiha & Shylashri Shankar, 2008. "Capture of Anti-Poverty Programs: An Analysis of the National Rural Employment Guarantee Program in India," ASARC Working Papers 2008-07, The Australian National University, Australia South Asia Research Centre.
- 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 62185, Agricultural and Applied Economics Association.
- Ravallion, Martin, 1990. "On the coverage of public employment schemes for poverty alleviation," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 57-79, November.
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