Appraising workfare programs

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Abstract
Workfare programs aim to reduce poverty by providing low-wage work for those who need it. They are often turned to in a crisis when there is too little time for a rigorous evaluation. They are also relatively complex programs, and difficult to evaluate. The author offers some simple analytical tools for rapidly appraising workfare programs. For pedagogic purposes, the two programs are stylized versions of a range of programs found in actual practice. One is for a middle-income country (in which unemployment has risen sharply in the wake of macroeconomic stabilization and reform), the other for a low-income country (hit by severe drought). The sole objective of both programs is to reduce poverty. By rough calculations, the cost of a $1 gain to the poor is $2.50 in both cases though the same gain in current earnings would cost 50 to 100 percent more. Benefits to the poor could be greatly enhanced by design changes -- for example, switching to more labor-intensive production methods for subprojects (in the middle-income country); enhancing the indirect benefits within poor communities from the assets created; or striving for greater cost recovery from the nonpoor.
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