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Is a Guaranteed Living Wage a Good Anti-poverty Policy?
"Minimum wages are generally thought to be unenforceable in developing rural economies. But there is one solution - a workfare scheme in which the government acts as the employer of last resort. Is this a cost-effective policy against poverty? Using a microeconometric model of the casual labor market in rural India, the authors find that a guaranteed wage rate sufficient for a typical poor family to reach the poverty line would bring the annual poverty rate down from 34 percent to 25 percent at a fiscal cost representing 3-4 percent of GDP when run for the whole year. Confining the scheme to the lean season (three months) would bring the annual poverty rate down to 31 percent at a cost of 1.3 percent of GDP. While the gains from a guaranteed wage rate would be better targeted than a uniform (untargeted) cash transfer, the extra costs of the wage policy imply that it would have less impact on poverty."-- Cover verso.
Sending Farmers Back to School
The authors evaluate the impact of farmer field schools, an intensive participatory training program emphasizing integrated pest management. Their evaluation focuses on whether participation in the program has improved yields and reduced pesticide use among graduates and their neighbors who may have gained knowledge from graduates through informal communications. The authors use panel data covering the period 1991-99 in Indonesia. Their analysis, employing a modified "difference-in-differences" model, indicates that the program did not have significant effects on the performance of graduates and their neighbors. The authors discuss several plausible explanations for this outcome and suggest recommendations for improvements.
Monopoly Power and Distribution in Fragmented Markets
Evidence from Pakistan's Punjab indicates that monopoly power in the market for groundwater (irrigation water extracted using private tubewells) results in a substantial resource misallocation. But despite this substantial misallocation of groundwater, a welfare analysis shows that monopoly pricing of groundwater has limited effects on equity and efficiency. Policies aimed at eliminating monopoly pricing would do little to help the poorest farmers.
Growth, Urbanization and Poverty Reduction in India
Longstanding development issues are revisited in the light of our newly-constructed dataset of poverty measures for India spanning 60 years, including 20 years since reforms began in earnest in 1991. We find a downward trend in poverty measures since 1970, with an acceleration post-1991, despite rising inequality. Faster poverty decline came with both higher growth and a more pro-poor pattern of growth. Post-1991 data suggest stronger inter-sectoral linkages: urban consumption growth brought gains to the rural as well as the urban poor and the primary-secondary-tertiary composition of growth has ceased to matter as all three sectors contributed to poverty reduction.
Right to Work?
India's ambitious National Rural Employment Guarantee Act creates a justiciable 'right to work' by promising up to 100 days of employment per year to all rural households whose adult members want unskilled manual work on public works projects at the stipulated minimum wage. Are the conditions stipulated by the Act met in practice, under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)? What impact on poverty do the earnings from the scheme have? Does the scheme meet its potential? How can it do better? Right to Work? Assessing India's Employment Guarantee Scheme in Bihar studies the MGNREGS's impact across India, then focuses on Bihar, the country's third largest and o...
Why Did Poverty Decline in India?
This paper uses panel data to analyze factors that contributed to the rapid decline in poverty in India between 2005 and 2012. The analysis employs a nonparametric decomposition method that measures the relative contributions of different components of household livelihoods to observed changes in poverty. The results show that poverty decline is associated with a significant increase in labor earnings, explained in turn by a steep rise in wages for unskilled labor, and diversification from farm to nonfarm sources of income in rural areas. Transfers, in the form of remittances and social programs, have contributed but are not the primary drivers of poverty ecline over this period. The pattern of changes is consistent with processes associated with structural transformation, which add up to a highly pro-poor pattern of income growth over the initial distribution of income and consumption. However, certain social groups (Adivasis and alits) are found to be more likely to stay in or fall into poverty and less likely to move out of poverty. And even as poverty has reduced dramatically, the share of vulnerable population has not.
Looking Back on Two Decades of Poverty and Well-being in India
"This paper provides an overview of poverty and well-being trends in India since the mid-1990s. Poverty reduction since 2005 has been much faster than the earlier decade, as a result of broad-based growth across most geographic areas. Underlying this is a pattern of high mobility in economic status that has led to an emerging middle class. Still, a vast (and rising) share of the population faces significant risk of slipping back into poverty. India's poor are increasingly concentrated in low-income states with historically lower rates of economic progress. Even as India has reduced poverty faster than the developing world as a whole, the degree of poverty reduction associated with growth has been substantially lower than in some of its middle-income peers. India faces important challenges in nonmonetary dimensions of welfare as well. Despite success on important fronts, such as infant and child mortality and secondary education, progress has been slow in others, such as sanitation and nutrition, and lags behind some other countries that are at a similar stage of development"--Abstract.
Is a Guaranteed Living Wage a Good Anti-Poverty Policy?
Minimum wages are generally thought to be unenforceable in developing rural economies. But there is one solution - a workfare scheme in which the government acts as the employer of last resort. Is this a cost-effective policy against poverty? Using a microeconometric model of the casual labor market in rural India, the authors find that a guaranteed wage rate sufficient for a typical poor family to reach the poverty line would bring the annual poverty rate down from 34 percent to 25 percent at a fiscal cost representing 3-4 percent of GDP when run for the whole year. Confining the scheme to the lean season (three months) would bring the annual poverty rate down to 31 percent at a cost of 1.3 percent of GDP. While the gains from a guaranteed wage rate would be better targeted than a uniform (untargeted) cash transfer, the extra costs of the wage policy imply that it would have less impact on poverty.
Billions of Entrepreneurs
China and India are home to one-third of the world's population. And they're undergoing social and economic revolutions that are capturing the best minds--and money--of Western business. In Billions of Entrepreneurs, Tarun Khanna examines the entrepreneurial forces driving China's and India's trajectories of development. He shows where these trajectories overlap and complement one another--and where they diverge and compete. He also reveals how Western companies can participate in this development. Through intriguing comparisons, the author probes important differences between China and India in areas such as information and transparency, the roles of capital markets and talent, public and p...
Well Begun but Not Yet Done
This book presents the key findings from a new poverty assessment for Vietnam, led jointly by the World Bank and the Vietnam Academy of Social Sciences (VASS). It takes a fresh look at the lives of poor men, women, and children, and explores the constraints and opportunities they face today in rising out of poverty. The book aims to do three things. First, it proposes revisions to Vietnam’s poverty monitoring system—via better data, updated welfare aggregates, and new poverty lines—to bring these more in line with economic and social conditions in present-day Vietnam. Second, it revisits the stylized facts about deprivation and poverty in Vietnam, and develops an updated profile and di...
