Cash or work: What do people want?

The debate about how best to assist the poor is not going away.  Read some of our previous posts on this in issue in Tanzania , Sierra Leone and Kenya .

Are cash transfers more effective than government services in adressing poverty? If you do settle on cash transfers, should they cover a large part of the population in the form of a basic income grant? Or should such transfers be targeted at specifically vulnerable groups? And what conditions should be attached to such transfers  apart from a means test (every doesn’t even agree that means tests are a good ideas)? Should cash transfers be conditional on some ‘good behaviour’ such as sending your children to school (such as in Oportunidades in Mexico) or are such conditions unnecessary red tape separating cash from people that really need it? These and other similar questions continue to spice efforts to assist the poor and vulnerable.

The NREGA scheme in India is very much at the forefront of these debates. In a recent article Sowmya Kidambi and Aruna Roy of the MKSS argued that the complexities of conditional cash transfers make them more vulnerable to corruption than unconditional entitlements such as the NREGA. They also argue that there are important ideological difference between what they call a ‘cash dole’ and a scheme such as the NREGA that is based on the right to work. Read their article here.

 

When the Sweat of your Brow isn’t enough: How to get good pay and good work in Kenya

A recent paper by the International Poverty Center paints a familiar picture of unemployment in Kenya. Like many countries in Africa  under and undemployment is higher in rural than in urban areas; more women are affected by these phenomena than men; and the young and old working-age workers are more affected than the rest of the work force.

Eduardo Zebeda’s paper Addressing the Employment-Poverty Nexus in Kenya compares the effectiveness of a job-creation and a cash-transfer programme in alleviating the failures of the Kenyan labour market. He finds that cash-transfers are very effective in rural areas because of the high dependency ratio. He also finds that well designed job-creation programs are more effective in reaching extremely poor people in urban areas. They have the added advantage of creating local infrastructure.

However in the end Zebeda finds that a tertiary qualification and employment in the formal sector are the most important determinants of household income. In the long run, therefore, only the creation of formal sector employment and more and better tertiary education will provide a check on poverty in Kenya.

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