Labor markets and poverty in village economies

1. Background
Methods
Results
Conclusions
LABOR MARKETS AND POVERTY IN VILLAGE ECONOMIES
Research question
 80% women engaged only in:
maid service, casual wage labor,
livestock rearing
 Low hourly earnings in casual
jobs
 Only poor do casual jobs
 Casual jobs are low paid, low in
demand
Poor women are in a poverty trap .With no productive assets,
they can only do casual jobs which have low pay. Low pay jobs
have low income and poor can’t buy productive assets. With no
assets, they remain with low income and poverty
Whether enabling the
poorest women to take on
the same work activities as
the better-off
women in their villages can
set them on a sustainable
path out of poverty?
• Randomized roll out across 21,000 households in 1,309
villages covering 40 BRAC branches
• 4 rounds of survey in 2007, 2009, 2011, 2014 covering
6,700 ultra poor households
• Participatory wealth ranking exercise used before
baseline randomization for ranking households as ultra
poor, near poor, middle class, upper class
• Difference-in-difference specification used to identify
the impact of the Targeting the Ultra Poor (TUP)
program on individual and household level outcomes
4 years after, women devote:
• 217% more hours to livestock
rearing
• 26% fewer hours to maid
services
• 17% fewer hours to agriculture
labor
• 21% higher earnings compared
to control group
• 11% increase in per capita
consumption expenditure
• 54% increase in value of
household durables
• Value of assets owned is 159%
larger than control
• 82% increase in value of
landholdings
• Agriculture and maid wages are
9% and 11% higher respectively
• Average benefit cost ratio of
3.2 for TUP
• 22% Internal rate of return
• One-time asset and skills transfers to the ultra-poor enable them
to overcome barriers for accessing high-return labor activities
• Enabling the poor to allocate their labor to the activities chosen
by richer women may have a central role to play in eliminating
extreme poverty
• Ultra-poor women had idle work capacity and TUP enabled them
to utilize the idle capacity through livestock rearing
Reference
Bandiera, O., Burgess, R., Das, N., Gulesci, S., Rasul, I. and Sulaiman, M.,
2017. Labor markets and poverty in village economies. The Quarterly
Journal of Economics, 132(2), pp.811-870.