The finding, which was mentioned casually in an interview back in March, ignited a flurry of related debates ever since e. The basic story goes like this:
According to a recent World Bank report, they are implemented in 94 countries World Bank Governments might choose to implement workfare rather than or in complement to welfare programmes e. Requiring beneficiaries to do manual work on public projects imposes an ordeal on would-be beneficiaries, which deters the rich from claiming benefits and the poor from relying too much on them.
Because they hire workers on public works projects, these programmes reduce the labour supply available for private sector work. These effects are often ignored, because workfare programmes tend to target workers with few employment opportunities — for example, the NREGA targets rural workers during the lean season.
We exploit the roll-out of the programme inand compare districts that implemented the programme earlier to those that received it later. The wage effects are concentrated during the agricultural off-season January to Junewhen public works are open, and in seven states which provided most NREGA work.
We find that seasonal migration is lower in the state where more NREGA work is provided during the season when public works are open. Migrants who do NREGA work forgo much higher earnings in the city in order to stay in the village, which suggests that they incur significant migration costs, most of which are non-monetary.
We next show that wages rose faster in cities which rely on migrants from star states, and slower in cities which rely on migrants from other states.
The rural poor have employment opportunities in the private sector The first implication of our findings is that the opportunity cost of time of the rural poor in India is considerably higher than zero, even in the lean season of agriculture.
The NREGA, like other workfare programmes, aims to offer income support to people who have limited employment opportunities. However, we show that it displaces private sector work in the village or the city. Thus, the monetary gains from the programme are lower than wages earned on public works.
Rural employment programmes can also impact urban areas The second implication is that workfare programmes have important and far-reaching effects on labour markets.
The rural wage effects challenge the traditional view of rural India as a surplus labour economy, and suggest that competitive forces are at play in rural labour markets.
The indirect effects of these programmes are significant The third implication is that through private sector wages, local public works affect not only programme participants, but also workers and employers across the country.
Since the poor are more likely to work for wages and the rich more likely to hire workers, wage increases magnify the redistributive impact of workfare schemes. Conversely, richer rural and urban households stand to lose from increased wages, which may explain part of the political opposition to the NREGA.
NREGA versus a cash transfer programme Imbert We can use our results to compare poverty reduction achieved through NREGA with a cash transfer that would distribute the same budget equally across all rural households.
We measure rural poverty either by the poverty rate percentage of poor or by the poverty gap average distance of the poor to the poverty line in percentwhich is more sensitive to the depth of poverty.
On the other, the poverty gap is lower with the workfare scheme, due to the rise in private sector wage, which benefits disproportionately the poorest of the poor Kloner and Oldiges provide empirical evidence of this.
Workers hired on public works may learn useful skills, and infrastructure built may benefit the private sector e. A complete evaluation of workfare programmes would also include general equilibrium and long term effects e.
It is difficult to know how many and how much of these effects could be obtained by a welfare scheme. This column is published in collaboration with Ideas for India. Gehrke, E"An employment guarantee as risk insurance? Imbert, C and J Papp"Labor market effects of social programmes: Poverty and welfare in the wake of the world's largest job guarantee programme," Working PapersUniversity of Heidelberg, Department of Economics.
Murgai, R and M Ravallion"Is a guaranteed living wage a good anti-poverty policy? Ravi, S and M Engler"Workfare as an effective way to fight poverty:What We AEPS Offer? Our Aadhar Enabled Services is developed for precise needs of businesses for Micro ATM - A Doorstep Banking System..
Espay’s AEPS services offering comprises, Balance Inquiry – To simplify inter-operability across banks in a safe and secure manner.; Cash Withdrawal – To simplify payment of Government Entitlements such as NREGA, Social Security Pension, Handicapped Old.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of Government of India targets deprivation and food insecurity in rural households,. It is suggested that MGNREGA may have a general positive effect on the nutrition and well-being of children .
The Levy Economics Institute of Bard College is a non-profit, nonpartisan, public policy think tank. Socio-Economic Impact of Mgnrega - A Study Undertaken among Beneficiaries of 20 Villages of made to analyses the socio-economic impact of MGNREGA ahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is the flagship programme of the Indian.
Content on this website is published and managed by the Department/Organisation For any query regarding this website, please contact the Web Information Manager: . For any country to grow from Agrarian to developed economy, Manufacturing is important.
Manufacturing doesn’t require much of skills and the employment it generates is tremendous.
For once, India thought it leapfrogged that stage and can conquer g.