Is a guaranteed living wage a good anti-poverty policy?
By: Rinku Murgai, Martin Ravallion.
Contributors: Ravallion, Martin.; World Bank.
Series: Policy research working paper ;; 3640; Policy research working papers (Online) ;; 3640.
Publisher: World Bank
Published: 2005
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Minimum wage -- India.; Casual labor -- India.; Transfer payments -- India.; Poverty -- India.
Description: "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. "--World Bank web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.