Evaluating Workfare When the Work is Unpleasant: Evidence for India's National Rural Employment Guarantee Scheme

30 Pages Posted: 20 Apr 2016

See all articles by Arthur Alik-Lagrange

Arthur Alik-Lagrange

University of Toulouse 1 - Toulouse School of Economics (TSE)

Martin Ravallion

Georgetown University

Date Written: November 1, 2012

Abstract

Prevailing practices in evaluating workfare programs have ignored the disutility of the type of work done, with theoretically ambiguous implications for the impacts on poverty. In the case of India's National Rural Employment Guarantee Scheme, past assessments have relied solely on household consumption per person as the measure of economic welfare. The paper generalizes this measure to allow for the disutility of casual manual work. The new measure is calibrated to the distribution of the preference parameters implied by maximization of an idiosyncratic welfare function assuming that there is no rationing of the available work. The adjustment implies a substantially more "poor-poor" incidence of participation in the scheme than suggested by past methods. However, the overall impacts on poverty are lower, although still positive. The main conclusions are robust to a wide range of alternative parameter values and to allowing for involuntary unemployment using a sample of (self-declared) un-rationed workers.

Keywords: Rural Poverty Reduction, Economic Theory & Research, Labor Markets, Services & Transfers to Poor

Suggested Citation

Alik-Lagrange, Arthur and Ravallion, Martin, Evaluating Workfare When the Work is Unpleasant: Evidence for India's National Rural Employment Guarantee Scheme (November 1, 2012). World Bank Policy Research Working Paper No. 6272, Available at SSRN: https://ssrn.com/abstract=2178918

Arthur Alik-Lagrange (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Martin Ravallion

Georgetown University ( email )

Washington, DC 20057
United States

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