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Wages, participation and targeting-the case of the employment guarantee scheme in India

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  • Raghav Gaiha

    (Faculty of Management Studies, University of Delhi, India)

Abstract

Participation in the Employment Guarantee Scheme (EGS) changed significantly during the period 1979-89. A marked reduction in the share of EGS participants in the labour force was accompanied by a considerably lower proportion of the poor among them. While a small part of the reduction in EGS attendance was a direct consequence of the 'rationing' following the EGS wage hike in 1988, much of it was in fact due to expansion of employment opportunities in agriculture. Instead of helping the poor, a wage hike without a corresponding increase in the budgetary outlay thus made it harder for them to participate in EGS. Nevertheless, there were other significant benefits to the poor. One was the strong positive (long-run) effect of this scheme on agricultural wages. Another was income stabilization through employment in agriculturally slack periods. To the extent that exclusion of subsets of the poor from EGS can be minimized through improvements in its design and implementation, the benefits to the poor would be substantially greater for a given outlay.

Suggested Citation

  • Raghav Gaiha, 1996. "Wages, participation and targeting-the case of the employment guarantee scheme in India," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(6), pages 785-803.
    • Handle: RePEc:wly:jintdv:v:8:y:1996:i:6:p:785-803
    DOI: 10.1002/(SICI)1099-1328(199611)8:6<785::AID-JID362>3.0.CO;2-A
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    References listed on IDEAS

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    1. Deolalikar, A.B. & Gaiha, R., 1993. "What Determines Female Participation in Rural Public Works? The Case of India's Employment Guarantee Scheme," Discussion Papers in Economics at the University of Washington 93-05, Department of Economics at the University of Washington.
    2. Ravallion, Martin, 1991. "Reaching the Rural Poor through Public Employment: Arguments, Evidence, and Lessons from South Asia," The World Bank Research Observer, World Bank, vol. 6(2), pages 153-175, July.
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    Cited by:

    1. R Gaiha & K Imai, 2005. "A Review of the Employment Guarantee Scheme in India," Economics Discussion Paper Series 0513, Economics, The University of Manchester.
    2. Nancy Chau & Ravi Kanbur & Yu Qin, 2014. "Do public work schemes deter or encourage outmigration? Empirical evidence from China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    3. Ravi, Shamika & Engler, Monika, 2015. "Workfare as an Effective Way to Fight Poverty: The Case of India’s NREGS," World Development, Elsevier, vol. 67(C), pages 57-71.
    4. Nancy Chau & Ravi Kanbur & Yu Qin, 2014. "Do public work schemes deter or encourage outmigration? Empirical evidence from China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.

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