Supply variabilities in public workfares*

• 成果类型: Article
• 署名作者: Bahal, Girish; Shrivastava, Anand
• 署名单位: University of Western Australia; Azim Premji Foundation; Azim Premji University Bengaluru
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2020.102608
• 发表日期: 2021
• 关键词: Labor market; wage rigidity; market power; Public workfare; Wage compression; INDIA

摘要

This paper presents a model of the labor market where public workfares increase private wages by reducing labor supply. In a dynamic setting, we show that when wages are downwardly rigid, forward-looking employers optimally compress wage increases in response to intertemporal variability in the level of program implementation. The model generates two key predictions: greater variability in program provision results in a larger compression of wage increases, and compression of wage increases is more severe under low inflation. We empirically verify these predictions using data from two large workfares from India.