Working Paper: NBER ID: w21041
Authors: Arthur Aliklagrange; Martin Ravallion
Abstract: Evaluations of workfare programs in poor rural economies have typically ignored two features that policy makers stress: involuntary unemployment and the expected welfare losses from work requirements. The paper generalizes past evaluation theory and methods to incorporate both features, and shows that doing so can switch the policy ranking in favor of welfare over workfare. A case study for India’s massive National Rural Employment Guarantee Scheme indicates lower impacts on poverty than suggested by past methods, despite a more “poor-poor” incidence. A basic-income guarantee would dominate net workfare earnings in terms of the impact on poverty for a given budgetary outlay.
Keywords: workfare; welfare; poverty; evaluation; India
JEL Codes: D61; H43; H53; J08; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| welfare losses from workfare requirements (I38) | effectiveness of workfare programs (I38) |
| welfare losses from workfare requirements (I38) | poverty impacts of NREGS (I32) |
| internalizing welfare losses (D62) | cost-effectiveness rankings between workfare and welfare programs (I38) |
| disutility of work (J29) | understanding of program's targeting performance (C52) |
| internalizing unpleasant nature of work (J29) | cost-effectiveness of workfare (J38) |
| welfare losses from work (J32) | assessments of program effectiveness (I24) |