19 December 2011: Does India's Employment Guarantee Scheme Guarantee Employment? How Much Impact does it have on Poverty?

Martin Ravallion
World Bank

Abstract:
India’s National Rural Employment Guarantee Act (NREGA)
stipulates up to 100 days of work to any household who wants it, at
wage rates set around the levels of the statutory minimum wage rates
for agricultural labor. If the scheme worked in practice the way it
is designed there would be no un-met demand for work on the scheme.
Anyone who wanted work would get it. Under certain conditions, such a
scheme would have a huge impact on poverty in India. But are those
conditions met in practice? Possibly not all those who say they want
this work would want 100 days. There may be un-met demand for work,
such that not everyone who wants it can get it. There may well be some
foregone income—some “deadweight loss” from taking up work on the
scheme. The full wage rate stipulated under the scheme might not be
received by workers. While the National Rural Employment Guarantee
scheme is probably the largest single anti-poverty program anywhere,
there has been very little rigorous evaluative research.

The presentation will study the performance of the scheme in one of
the India’s poorest states, Bihar, drawing on a forthcoming report
documenting results from a panel survey of 2,000 households in rural
Bihar 2009-10. A variety of data sources and methods are
employed—including both observational (econometric) and experimental
methods—to address the key questions about performance of the scheme
in Bihar. The results confirm the potential for this scheme to reduce
poverty but point to a number of specific performance issues that
impede realizing that potential in practice. The results reveal a
large in-met demand for work on the scheme in Bihar, and very low
awareness of what needs to be done to obtain work, and low
participation by poor people in decisions about the scheme. A
randomized awareness intervention using a specially designed fictional
movie is shown to impact awareness, and more so for certain key
sub-groups. Specific actionable areas for reform are identified. (The
report is written by Puja Dutta, Rinku Murgai, Martin Ravallion and
Dominique van de Walle).

Date: December 19, 2011
Time: 12:30 P.M.

Venue:
Conference Room, 2nd Floor
The World Bank,
70 Lodi Estate,
New Delhi-110003(INDIA)

Location:

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Note:
Please confirm your attendance by mail to Jyoti Sriram at jsriram@worldbank.org by by Friday, December 16