Unintended consequences: How workfare programmes may fuel school dropouts in India [1]

Read “Workfare and Human Capital Investment: Evidence from India” by Manisha Shah and Bryce Millet Steinberg here [2].

Workfare schemes, designed as an alternative to more traditional social benefit programmes, are increasingly popular in developing countries. India’s National Rural Employment Guarantee Scheme (NREGS), one of the world’s largest workfare programmes, has been celebrated for leading to increased wages in rural areas. Yet research by Bryce Millet Steinberg and Manisha Shah finds that the programme has unintended consequences for children. In this VoxDevTalk, Steinberg discusses how the research team used multiple household surveys to uncover how the scheme’s promise of wages leads to increased labour demand. In turn, this increases the opportunity cost of remaining in school, with particularly large consequences for adolescents. These findings suggest the value of pairing workfare programmes with complementary policies to incentivise human capital investment.

Standfirst: 
Despite evidence of increasing household wages, anti-poverty schemes in India can have an adverse effect by lowering human capital investment
Interviewee: 
manishashah0 [3]
bryce.steinberg [4]
Date Published: 
Wednesday, January 13, 2021
Tags: 
India [5]
labour [6]
rural development [7]
children [8]
Cover Image: 
Topic: 
Labour Markets & Migration [9]
Related Content: 
Labour market effects of workfare programmes: Evidence from India’s NREGA [10]
India’s National Education Policy: A need to look beyond the classroom to improve results [11]
Assessing the effectiveness of active labour market programmes in developing countries [12]
Audio File: 
Audio icon Workfare in india.mp3 [13]
Photo Credit: 
Satyendra Kumar/flickr