Option Values, Switches, and Wages: An Analysis of the Employment Guarantee Scheme in India

Consistent with real option theory, the authors argue that the value of the Employment Guarantee Scheme (EGS) in rural India and its impact on workers' behavior does not depend so much on its income supplementation as on enlargement of opportunities in the uncertain local labor market. The choice between the EGS and other activities is modeled in a dynamic optimization framework, taking into account a fixed wage rate and certainty of employment under the EGS and a stochastic wage rate under other activities. Specifically, volatility of wages in the rural labor markets has important implications for switches into the EGS and for concomitant welfare effects. Under such conditions, the higher the EGS wage, the greater is its attractiveness to relatively skilled and affluent workers, and for those already in it to continue. These and related predictions of the model are validated by panel data estimation.     

Information,Access and Targeting: The National Rural Employment Guarantee Scheme in India

In this paper, the relationship is assessed between possessing information on, gaining access to and the efficacy of delivery of India's national rural employment guarantee scheme (NREGA) in three states. The results suggest that the link between information, access and the delivery of the scheme is not straightforward. Information can increase the propensity for the programme to be accessed by those who are not its primary target population, and can enhance efficacy of delivery to such beneficiaries. Lack of information, on the other hand, decreases the ability of citizens, particularly the acutely poor, to benefit from the scheme.     

Vulnerability,shocks and persistence of poverty: estimates for semi‐arid rural South India

This paper focuses on the vulnerability of rural households to poverty when a negative crop shock occurs. The analysis is based on the ICRISAT panel survey of households in a semi‐arid region in south India during 1975–84. Using a dynamic panel data model that takes into account effects of crop shocks, an assessment of vulnerability of different groups of households is carried out. What is somewhat surprising is that even sections of relatively affluent households are highly vulnerable to long spells of poverty when severe crop shocks occur. As such crop shocks are frequent in a harsh production environment, there must be a shift of emphasis in anti‐poverty measures from meeting income shortfalls among the poor to enabling the vulnerable to protect themselves better against these shocks.     

Vulnerability and poverty dynamics in Vietnam

Drawing upon the Vietnam Household Living Standards Survey (VHLSS) data that cover the whole of Vietnam in 2002 and 2004, ex ante measures of vulnerability are constructed. These are then compared with static indicators of poverty (i.e. the headcount ratio in a particular year). Detailed analyses of the panel data show that (i) in general, vulnerability in 2002 translates into poverty in 2004; (ii) vulnerability of the poor tends to perpetuate their poverty and (iii) sections of the nonpoor but vulnerable slip into poverty. Durable reduction in poverty is conditional on (i) accurate identification of the vulnerable, (ii) their sources of vulnerability and (iii) design of social safety nets that would enable the vulnerable to reduce risks and cope better with rapid integration of markets with the larger global economy.     

On testing the stability of input-output relationships in the Indian economy

Scepticism is often expressed about plan models for their reliance on input-output relationships based on not-very-recent data. An attempt is made in this paper to demonstrate, with Indian data, that temporal changes in input-output relationships in general are likely to be small. In a few crucial cases, however, the changes may be more than nominal and adjustments for intra-sectoral product mix and technological changes would be necessary for minimising the errors in intermediate demand projections. While the applicability of these findings to economies with a slow rate of growth seems plausible, the same cannot be said for other developing economies experiencing a much faster rate of growth.     

Information processing for a finite resource allocation mechanism

Summary deal with an organization havingm individual agents (the agents) and one central agent or agency (the coordinator), and the problem of allocating a fixed supply ofn commodities among the agents. The coordinator wishes to distribute the commodities in such a way as to maximize an objective function whose arguments are functions known (implicitly) to the individual agents, but not to the coordinator. The more information the coordinator obtains about the individual agents' functions, the better the allocation decision he or she can make; however, gaining such information is costly, so that the coordinator must balance the potential gain against the cost of acquiring additional information. We find a satisficing solution to this problem which is computable and which terminates in a finite number of steps.We would like to thank Leo Hurwicz, Ken Matheny, Shailendra Mehta, Bill Novshek, Roy Radner, Stan Reiter, Vernon Smith, Mark Walker, and, especially, John Ledyard and Tom Marschak, for helpful comments and suggestions. We must, of course, however reluctantly, accept responsibility for any remaining defects.     

Poverty,inequality and ethnic minorities in Vietnam

The present study examines how and why ethnic minorities are poorer than ethnic majorities in Vietnam using the Vietnam Household Living Standards Survey data for 2002 and 2004. First, the analysis confirms that households belonging to the ethnic minority groups are not only poorer but also more vulnerable to various shocks than those in the ethnic majority groups, namely the Kinh and the Chinese. Second, household composition (e.g., dependency burden), education, land holding and location are important determinants of expenditure and poverty, whilst there is some diversity among different ethnic groups. Finally, the decomposition analyses reveal that the ethnic minorities are poorer not necessarily because they have more disadvantaged household characteristics (e.g., educational attainment or location), but, more importantly, because the returns to the characteristics are much lower for ethnic minorities than for the majorities. Government policies to reduce structural differences between ethnic majorities and minorities are imperative to address the disparities in returns to endowments between them.     

Fiscal Stimulus,Agricultural Growth and Poverty in Asia

Recent debates on a sustainable recovery of the global economy have tended to overemphasise the ‘savings glut’ hypothesis and the unavoidable imperative of higher consumption in China and other emerging Asian countries. That oversaving and not underinvestment is coming in the way of a quicker and more durable recovery is not just simplistic but misleading from a medium‐term growth perspective for emerging Asian countries and other developing countries in this region. Drawing upon country panel data for developing countries and a subsample of Asian countries during the period 1991–2007, this study makes a case for a bold and coordinated fiscal stimulus, directed to stimulating agricultural and overall growth, and mitigation of poverty and hunger. Our simulations further suggest that poverty reduction is likely to be larger if the fiscal stimulus is directed to social spending in health and education sectors. Indeed, if our simulations of fiscal impacts have any validity, the dire predictions of millions getting trapped in poverty and hunger may turn out to be exaggerated. The prospects of a strong recovery led by fiscal stimulus are thus real and achievable.     

Does early bird catch the worm or a lower GPA? Evidence from a liberal arts college

Research in psychology has shown that early morning classes are not conducive to learning because of the peculiar sleep cycles of adolescents and young adults that cause them to be especially groggy in the morning. Our study examines the relationship between the times that classes are offered and the grades that students in these classes earn at a highly selective liberal arts college. Our main findings are that morning classes are harmful for student achievement. Grades are especially lower for classes that were scheduled at 8 am and 9 am. Moreover, while students of both genders are adversely affected by early morning courses, the effects are particularly pronounced for male students. This institution assigns students randomly to different sections of the same course, thus creating a quasi-natural experiment and enabling us to control for unobserved characteristics of students. In addition, we include student and faculty fixed effects.