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Workfare vs. Welfare: Incentive Arguments for Work Requirements in Poverty Alleviation Programs

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  • Besley, Timothy
  • Coate, Stephen

Abstract

Whether those who claim benefits should face a work requirement has been an issue of long-standing social concern. Important examples of schemes which require work are the Californian workfare program, Indian food security schemes and the English Poor Law of 1834. We present two arguments for demanding work for benefits: first, a work requirement can scree the truly needy from those who are not in need of support and second, it can provide incentives for people to invest in skills which enable them to avoid poverty. In the context of a simple model of a target population with two ability types we find conditions under which a work requirement reduces the costs of poor relief, and those when it does not. We concentrate on a case when work done in return for benefits has no social value, showing that even if this is true, work requirements may be a valuable policy tool.

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  • Besley, Timothy & Coate, Stephen, 1989. "Workfare vs. Welfare: Incentive Arguments for Work Requirements in Poverty Alleviation Programs," Economic Research Papers 268349, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:268349
    DOI: 10.22004/ag.econ.268349
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    Cited by:

    1. Basu, Arnab K. & Chau, Nancy H. & Kanbur, Ravi, 2009. "A theory of employment guarantees: Contestability, credibility and distributional concerns," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 482-497, April.
    2. Jalan, Jyotsna & Ravallion, Martin, 1999. "Income gains to the poor from workfare - estimates for Argentina's TRABAJAR Program," Policy Research Working Paper Series 2149, The World Bank.
    3. Emanuela Galasso & Martin Ravallion & Agustin Salvia, 2004. "Assisting the Transition from Workfare to Work: A Randomized Experiment," ILR Review, Cornell University, ILR School, vol. 58(1), pages 128-142, October.
    4. Fortin, Bernard, 1997. "Dépendance à l’égard de l’aide sociale et réforme de la sécurité du revenu," L'Actualité Economique, Société Canadienne de Science Economique, vol. 73(4), pages 557-573, décembre.
    5. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    6. van de Walle, Dominique, 1998. "Targeting Revisited," The World Bank Research Observer, World Bank, vol. 13(2), pages 231-248, August.
    7. Ravallion, Martin, 1998. "Appraising workfare programs," Policy Research Working Paper Series 1955, The World Bank.
    8. Raghav Gaiha & Katsushi Imai, 2002. "Rural Public Works and Poverty Alleviation--the case of the employment guarantee scheme in Maharashtra," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(2), pages 131-151.
    9. Murgai, Rinku & Ravallion, Martin, 2005. "Is a guaranteed living wage a good anti-poverty policy?," Policy Research Working Paper Series 3640, The World Bank.
    10. Ashok S. Rai, "undated". "Targeting the Poor Using Community Information," CID Working Papers 22, Center for International Development at Harvard University.
    11. Ravallion, Martin, 1999. "Appraising Workfare," The World Bank Research Observer, World Bank, vol. 14(1), pages 31-48, February.
    12. Sanjay Jain, 2017. "Worker retraining and transfer payments: The political economy of social protection," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
    13. Sheila Neysmith & Marge Reitsma-Street, 2000. "Valuing Unpaid Work in the Third Sector: The Case of Community Resources Centres," Canadian Public Policy, University of Toronto Press, vol. 26(3), pages 331-346, September.

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    Keywords

    Labor and Human Capital; Public Economics;

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