Poverty and Employability Effects

Abstract

In 1993 Argentina began implementing workfare programs, and workfare has become a central public policy starting 2002 when the government increased the number of beneficiaries from 100,000 to 2 million people in a country of 38 million. We explore targeting, poverty and employability effects of workfare before 2002 based on the permanent household survey (EPH). We find that the program was pro-poor although more than one third of participants did not satisfy the eligibility criteria. Our estimates suggest that the income of participants increased during treatment – particularly for women – indicating beneficial short run poverty effects. However, the long run effects of the program are not obvious due to selection on treatment completion. We present evidence suggesting that – for a large fraction of participants – the program generated dependency and did not increase their human capital.