Self-Targeting Workfare Mechanism
RCTReview
Traditional social safety nets often struggle with administrative costs and screening errors when attempting to identify the poorest individuals. Without effective screening, cash assistance risks capture by non-poor households who do not urgently require aid.
Picture this
Imagine a free soup kitchen that serves basic soup, but requires everyone in line to clean tables for an hour to get a bowl. People with good jobs or money will not stand in line and clean tables just for basic soup, so only people who truly need the meal will show up.
What the evidence says
Workfare programs paying at or below minimum wage ($1.80 per day in Sierra Leone) successfully targeted impoverished individuals, boosting participant incomes by 29 percent during active participation without attracting higher-wage workers.
- Who was studied
- Multi-country analysis across 13 randomized evaluations in low- and middle-income nations, including Sierra Leone, Côte d'Ivoire, and the Democratic Republic of the Congo.
- How
- Systematic review of randomized controlled trials evaluating workfare targeting efficiency, labor constraints, and transfer rates.
What to do
Set public works wage rates at or slightly below prevailing market floor rates while requiring physical labor to enforce automatic self-selection by low-income individuals.
From the source
"Given PWPs' demanding labor and time commitments, and because PWPs generally pay at or below minimum wage, individuals who have access to alternative income sources should theoretically avoid these cash-for-work programs. In comparison to traditional cash transfer programs, PWPs are thus thought to better target people most in need of financial support."
Public works programs and labor market outcomes.pdf