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Does India's Employment Guarantee Scheme guarantee employment?

Seminar, 6 July, 2012
Martin Ravallion, Dominique Van De Walle

Abstract

India's National Rural Employment Guarantee Act of 2005 stipulates up to 100 days of employment on public works projects for any rural household who wants it at the stipulated minimum wage rates. The aim is to dramatically reduce poverty in India by providing extra earnings for poor families, as well as empowerment and insurance. In terms of population coverage this is probably the largest direct intervention against poverty in human history.

If this scheme worked in practice in the way it was designed, it would have a huge impact on poverty in India, and help empower poor workers, as well as offering insurance for many rural families. However, are those conditions met in practice? Evidence will be presented indicating that the scheme is working far better in meeting the demand for work in some states of India than in others.

This seminar will focus on the performance of the scheme in India's poorest state, Bihar, drawing on a panel survey of 3,000 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.

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