Is Workfare Cost-effective against Poverty in a Poor Labor-Surplus Economy?

Rinku Murgai, Martin Ravallion and Dominique van de Walle

The World Bank Economic Review, 2016, vol. 30, issue 3, 413-445

Abstract: Workfare has often seemed an attractive option for making self-targeted transfers to poor people. But is this incentive argument strong enough in practice to prefer unproductive workfare to even untargeted cash transfers? A nonparametric survey-based method is used to assess the cost-effectiveness of a large workfare scheme in a poor state of India with high unemployment. Forgone earnings are evident but fall short of market wages. For the same budget, unproductive workfare has less impact on poverty than either a basic-income scheme or transfers tied to the government's assignment of ration cards. The productivity of workfare is thus crucial to its justification as an antipoverty policy.

JEL-codes: I32 I38 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (14)

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Working Paper: Is workfare cost-effective against poverty in a poor labor-surplus economy? (2013)
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