Is a Guaranteed Living Wage a Good Anti-Poverty Policy?

• Tác giả: Rinku Murgai
• Ngôn ngữ: eng
• Ký hiệu phân loại: 331.21 Compensation
• Thông tin xuất bản: World Bank, Washington, DC, 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 295065
• Chủ đề: 1. ADMINISTRATIVE COSTS; 2. AUDITS; 3. CASH TRANSFERS; 4. CONSUMPTION EXPENDITURES; 5. COST EFFECTIVENESS

Tóm tắt

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.