Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy?
Workfare schemes impose work requirements on beneficiaries. This has seemed an attractive idea for self-targeting transfers to poor people. This incentive argument does not imply, however, that workfare is more cost-effective against poverty than e...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/10/18425307/workfare-cost-effective-against-poverty-poor-labor-surplus-economy http://hdl.handle.net/10986/16888 |
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okr-10986-16888 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADJUSTMENT PROCESS AGRICULTURAL WAGE AGRICULTURAL WAGES ANTI-POVERTY ATTRITION AVERAGE UNEMPLOYMENT AVERAGE WAGE BARGAINING POWER CASH TRANSFERS CASUAL WORKERS CATCHMENT AREA CONSUMER PRICE INDEX COST EFFECTIVENESS COST-EFFECTIVENESS COUNTERFACTUAL DEMOCRACY DEVELOPMENT ECONOMICS DIVIDEND DROUGHT EARNING ECONOMETRICS ECONOMIC GROWTH ECONOMICS EGS EMPLOYMENT EFFECTS EMPLOYMENT GUARANTEE EMPLOYMENT GUARANTEE SCHEME EMPLOYMENT GUARANTEE SCHEMES EMPLOYMENT OPPORTUNITIES EMPLOYMENT PROGRAMS FACTORING FAMINE FARM WORK FARMERS FINDING WORK FOOD SECURITY FOOD SUBSIDIES GENERAL EQUILIBRIUM GROSS WAGES HIGH UNEMPLOYMENT HUMAN CAPITAL HUMAN DEVELOPMENT HUMAN RESOURCES IMPACT ON POVERTY INCOME INCOME COUNTRIES INCOMES INFLATION JOBS LABORERS LABOUR LACK OF INFORMATION LAWS LOCAL LABOR MARKETS LOW INCOME MALE WORKERS MANPOWER MANPOWER POLICY MANUAL LABOR MARKET WAGE MARKET WAGES MINIMUM WAGE MONOPSONY MONOPSONY POWER NATIONAL INCOME NET INCOME NON-WAGE COSTS OLD AGE OPPORTUNITY COSTS OUTPUTS PER CAPITA CONSUMPTION POLITICAL ECONOMY POLITICAL PARTICIPATION POOR POOR FAMILIES POOR HOUSEHOLDS POOR PEOPLE POOR RURAL HOUSEHOLDS POST-REFORM POVERTY ALLEVIATION POVERTY IMPACT POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATES POVERTY REDUCTION POVERTY STATUS PRESENT EVIDENCE PRIVATE EMPLOYMENT PRIVATE SECTOR PRIVATE SECTOR WAGES PRODUCTIVITY PUBLIC EMPLOYMENT PUBLIC EXPENDITURES PUBLIC SERVICES PUBLIC SPENDING PUBLIC WORKS PUBLIC WORKS PROGRAM PUBLIC WORKS SCHEMES RATION SHOPS RESOURCE ALLOCATION RIGHT TO WORK RURAL RURAL AREAS RURAL DEVELOPMENT RURAL ECONOMY RURAL EMPLOYMENT RURAL FARM RURAL HOUSEHOLD RURAL LABOR RURAL LABOR MARKET RURAL POOR RURAL POPULATION RURAL POVERTY RURAL PUBLIC RURAL UNEMPLOYMENT RURAL WATER RURAL WORKERS SOCIAL SECURITY TARGETING TAXATION TOTAL WAGE TOTAL WAGES TOTAL WORKERS TRANSFER BENEFITS UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNINTENDED BENEFICIARIES VILLAGE LEADERS WAGE BARGAINING WAGE DATA WAGE DISTRIBUTION WAGE FLOOR WAGE GAINS WAGE INCREASE WAGE RATE WAGE RATES WELFARE RECIPIENTS WOMEN WORKERS WORK ACTIVITY WORKER WORKFARE PARTICIPANTS NREGA forgone income |
| spellingShingle |
ACCOUNTING ADJUSTMENT PROCESS AGRICULTURAL WAGE AGRICULTURAL WAGES ANTI-POVERTY ATTRITION AVERAGE UNEMPLOYMENT AVERAGE WAGE BARGAINING POWER CASH TRANSFERS CASUAL WORKERS CATCHMENT AREA CONSUMER PRICE INDEX COST EFFECTIVENESS COST-EFFECTIVENESS COUNTERFACTUAL DEMOCRACY DEVELOPMENT ECONOMICS DIVIDEND DROUGHT EARNING ECONOMETRICS ECONOMIC GROWTH ECONOMICS EGS EMPLOYMENT EFFECTS EMPLOYMENT GUARANTEE EMPLOYMENT GUARANTEE SCHEME EMPLOYMENT GUARANTEE SCHEMES EMPLOYMENT OPPORTUNITIES EMPLOYMENT PROGRAMS FACTORING FAMINE FARM WORK FARMERS FINDING WORK FOOD SECURITY FOOD SUBSIDIES GENERAL EQUILIBRIUM GROSS WAGES HIGH UNEMPLOYMENT HUMAN CAPITAL HUMAN DEVELOPMENT HUMAN RESOURCES IMPACT ON POVERTY INCOME INCOME COUNTRIES INCOMES INFLATION JOBS LABORERS LABOUR LACK OF INFORMATION LAWS LOCAL LABOR MARKETS LOW INCOME MALE WORKERS MANPOWER MANPOWER POLICY MANUAL LABOR MARKET WAGE MARKET WAGES MINIMUM WAGE MONOPSONY MONOPSONY POWER NATIONAL INCOME NET INCOME NON-WAGE COSTS OLD AGE OPPORTUNITY COSTS OUTPUTS PER CAPITA CONSUMPTION POLITICAL ECONOMY POLITICAL PARTICIPATION POOR POOR FAMILIES POOR HOUSEHOLDS POOR PEOPLE POOR RURAL HOUSEHOLDS POST-REFORM POVERTY ALLEVIATION POVERTY IMPACT POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATES POVERTY REDUCTION POVERTY STATUS PRESENT EVIDENCE PRIVATE EMPLOYMENT PRIVATE SECTOR PRIVATE SECTOR WAGES PRODUCTIVITY PUBLIC EMPLOYMENT PUBLIC EXPENDITURES PUBLIC SERVICES PUBLIC SPENDING PUBLIC WORKS PUBLIC WORKS PROGRAM PUBLIC WORKS SCHEMES RATION SHOPS RESOURCE ALLOCATION RIGHT TO WORK RURAL RURAL AREAS RURAL DEVELOPMENT RURAL ECONOMY RURAL EMPLOYMENT RURAL FARM RURAL HOUSEHOLD RURAL LABOR RURAL LABOR MARKET RURAL POOR RURAL POPULATION RURAL POVERTY RURAL PUBLIC RURAL UNEMPLOYMENT RURAL WATER RURAL WORKERS SOCIAL SECURITY TARGETING TAXATION TOTAL WAGE TOTAL WAGES TOTAL WORKERS TRANSFER BENEFITS UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNINTENDED BENEFICIARIES VILLAGE LEADERS WAGE BARGAINING WAGE DATA WAGE DISTRIBUTION WAGE FLOOR WAGE GAINS WAGE INCREASE WAGE RATE WAGE RATES WELFARE RECIPIENTS WOMEN WORKERS WORK ACTIVITY WORKER WORKFARE PARTICIPANTS NREGA forgone income Murgai, Rinku Ravallion, Martin van de Walle, Dominique Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| geographic_facet |
South Asia South Asia India |
| relation |
Policy Research Working Paper;No. 6673 |
| description |
Workfare schemes impose work
requirements on beneficiaries. This has seemed an attractive
idea for self-targeting transfers to poor people. This
incentive argument does not imply, however, that workfare is
more cost-effective against poverty than even
poorly-targeted options, given hidden costs of
participation. In particular, even poor workfare
participants in a labor-surplus economy can be expected to
have some forgone income when they take up such a scheme. A
survey-based method is used to assess the cost-effectiveness
of India's Employment Guarantee Scheme in Bihar.
Participants are found to have forgone earnings, although
these fall well short of market wages on average. Factoring
in these hidden costs, the paper finds that for the same
budget, workfare has less impact on poverty than either a
basic-income scheme (providing the same transfer to all) or
uniform transfers based on the government's
below-poverty-line ration cards. For workfare to dominate
other options, it would have to work better in practice.
Reforms would need to reduce the substantial unmet demand
for work, close the gap between stipulated wages and wages
received, and ensure that workfare is productive -- that the
assets created are of value to poor people.
Cost-effectiveness would need to be reassessed at the
implied higher levels of funding. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Murgai, Rinku Ravallion, Martin van de Walle, Dominique |
| author_facet |
Murgai, Rinku Ravallion, Martin van de Walle, Dominique |
| author_sort |
Murgai, Rinku |
| title |
Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| title_short |
Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| title_full |
Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| title_fullStr |
Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| title_full_unstemmed |
Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? |
| title_sort |
is workfare cost-effective against poverty in a poor labor-surplus economy? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/10/18425307/workfare-cost-effective-against-poverty-poor-labor-surplus-economy http://hdl.handle.net/10986/16888 |
| _version_ |
1764434817858928640 |
| spelling |
okr-10986-168882021-04-23T14:03:32Z Is Workfare Cost-Effective against Poverty in a Poor Labor-Surplus Economy? Murgai, Rinku Ravallion, Martin van de Walle, Dominique ACCOUNTING ADJUSTMENT PROCESS AGRICULTURAL WAGE AGRICULTURAL WAGES ANTI-POVERTY ATTRITION AVERAGE UNEMPLOYMENT AVERAGE WAGE BARGAINING POWER CASH TRANSFERS CASUAL WORKERS CATCHMENT AREA CONSUMER PRICE INDEX COST EFFECTIVENESS COST-EFFECTIVENESS COUNTERFACTUAL DEMOCRACY DEVELOPMENT ECONOMICS DIVIDEND DROUGHT EARNING ECONOMETRICS ECONOMIC GROWTH ECONOMICS EGS EMPLOYMENT EFFECTS EMPLOYMENT GUARANTEE EMPLOYMENT GUARANTEE SCHEME EMPLOYMENT GUARANTEE SCHEMES EMPLOYMENT OPPORTUNITIES EMPLOYMENT PROGRAMS FACTORING FAMINE FARM WORK FARMERS FINDING WORK FOOD SECURITY FOOD SUBSIDIES GENERAL EQUILIBRIUM GROSS WAGES HIGH UNEMPLOYMENT HUMAN CAPITAL HUMAN DEVELOPMENT HUMAN RESOURCES IMPACT ON POVERTY INCOME INCOME COUNTRIES INCOMES INFLATION JOBS LABORERS LABOUR LACK OF INFORMATION LAWS LOCAL LABOR MARKETS LOW INCOME MALE WORKERS MANPOWER MANPOWER POLICY MANUAL LABOR MARKET WAGE MARKET WAGES MINIMUM WAGE MONOPSONY MONOPSONY POWER NATIONAL INCOME NET INCOME NON-WAGE COSTS OLD AGE OPPORTUNITY COSTS OUTPUTS PER CAPITA CONSUMPTION POLITICAL ECONOMY POLITICAL PARTICIPATION POOR POOR FAMILIES POOR HOUSEHOLDS POOR PEOPLE POOR RURAL HOUSEHOLDS POST-REFORM POVERTY ALLEVIATION POVERTY IMPACT POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATES POVERTY REDUCTION POVERTY STATUS PRESENT EVIDENCE PRIVATE EMPLOYMENT PRIVATE SECTOR PRIVATE SECTOR WAGES PRODUCTIVITY PUBLIC EMPLOYMENT PUBLIC EXPENDITURES PUBLIC SERVICES PUBLIC SPENDING PUBLIC WORKS PUBLIC WORKS PROGRAM PUBLIC WORKS SCHEMES RATION SHOPS RESOURCE ALLOCATION RIGHT TO WORK RURAL RURAL AREAS RURAL DEVELOPMENT RURAL ECONOMY RURAL EMPLOYMENT RURAL FARM RURAL HOUSEHOLD RURAL LABOR RURAL LABOR MARKET RURAL POOR RURAL POPULATION RURAL POVERTY RURAL PUBLIC RURAL UNEMPLOYMENT RURAL WATER RURAL WORKERS SOCIAL SECURITY TARGETING TAXATION TOTAL WAGE TOTAL WAGES TOTAL WORKERS TRANSFER BENEFITS UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNINTENDED BENEFICIARIES VILLAGE LEADERS WAGE BARGAINING WAGE DATA WAGE DISTRIBUTION WAGE FLOOR WAGE GAINS WAGE INCREASE WAGE RATE WAGE RATES WELFARE RECIPIENTS WOMEN WORKERS WORK ACTIVITY WORKER WORKFARE PARTICIPANTS NREGA forgone income Workfare schemes impose work requirements on beneficiaries. This has seemed an attractive idea for self-targeting transfers to poor people. This incentive argument does not imply, however, that workfare is more cost-effective against poverty than even poorly-targeted options, given hidden costs of participation. In particular, even poor workfare participants in a labor-surplus economy can be expected to have some forgone income when they take up such a scheme. A survey-based method is used to assess the cost-effectiveness of India's Employment Guarantee Scheme in Bihar. Participants are found to have forgone earnings, although these fall well short of market wages on average. Factoring in these hidden costs, the paper finds that for the same budget, workfare has less impact on poverty than either a basic-income scheme (providing the same transfer to all) or uniform transfers based on the government's below-poverty-line ration cards. For workfare to dominate other options, it would have to work better in practice. Reforms would need to reduce the substantial unmet demand for work, close the gap between stipulated wages and wages received, and ensure that workfare is productive -- that the assets created are of value to poor people. Cost-effectiveness would need to be reassessed at the implied higher levels of funding. 2014-02-04T20:12:39Z 2014-02-04T20:12:39Z 2013-10 http://documents.worldbank.org/curated/en/2013/10/18425307/workfare-cost-effective-against-poverty-poor-labor-surplus-economy http://hdl.handle.net/10986/16888 English en_US Policy Research Working Paper;No. 6673 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia South Asia India |