Inconsistent Policy Evaluation: A Case Study for a Large Workfare Program

Arthur Alik-Lagrange and Martin Ravallion

No 21041, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D61 H43 H53 J08 O15 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-ltv
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