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

Raghav Gaiha
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Raghav Gaiha: Faculty of Management Studies, University of Delhi, India, Postal: Faculty of Management Studies, University of Delhi, India

Journal of International Development, 1996, vol. 8, issue 6, 785-803

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.

Date: 1996
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Persistent link: https://EconPapers.repec.org/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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