This paper investigates the dynamic aspects of poverty and anti-poverty
interventions, particularly focusing on promotional effects, i.e., the
effects of helping the poor escape poverty and protective effects, i.e.,
the effects of preventing the non-poor from slipping into poverty. We
test the effectiveness of the Employment Guarantee Scheme (EGS) in rural
India as a social safety net drawing upon the ICRISAT survey data. We
have carried out the econometric analysis, namely Cox Proportional
Hazard Model to estimate the probability of entering or exiting poverty
by various covariates drawing upon annual household panel data during
the period 1979 to 1984.
The following three conclusions have been derived by our estimation
results. Firstly, the results suggest that the EGS has significant
promotional and protective roles irrespective of the choice of income
poverty lines. This is an important finding in the sense tha t 1) the
EGS was effective in reducing poverty in the long run since poverty
reduction is achieved through positive promotional and protective roles
and, 2) the EGS served as insurance for an annual income shortfall.
Secondly, we have identified other important factors which prevent
households from entering poverty and help them escape poverty, such as
decrease in illness of household members , land and access to formal and
informal borrowings. Thirdly, we have found that the static determinants
of poverty identified by the probit model and 'the cause' of poverty
estimated by the Cox Model are not much different, implying that static
analysis has some implication in identifying the causes of long-term
The employment guarantee scheme as a social safety net- poverty dynamics and poverty alleviation, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 35 pp.
The employment guarantee scheme as a social safety net - poverty dynamics and poverty alleviation.