Roger Hosein TEDU UWI St Augustine
Outline of presentation � a) background on Make work programs � b) some simple economics of Make work programs in TT, Suriname and Guyana � c) basic welfare calculations � d) Make work programs as a special case of a public good for single women 2
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Introduction � A low quality of labor and an oversized public sector represents an inefficient use of budgetary resources in any economy but for small resource starved economies, this makes the problem even more compounded. An oversized and inefficiently run public service wastes scarce public sector resources but also stifles the private sector for scarce labor. 4
Rent dispersion: transfers and subsidies and a bloated public sector � One strategy that politicians sometimes use to extract rents is to oversize public employment. Thus, bureaucrats may bloat the public sector with excessive workers so as to extract different kinds of perks from them. Alternatively, overemployment may be the result of the creation of (unnecessary) jobs as a way to directly appropriate income from that or as a channel to make transfers to certain desired groups of people. Indeed it is possible that the beneficiaries of public sector jobs endogenize rent seeking by bureaucrats as unskilled workers benefitting from public sector jobs and higher wages (motivated by the actions of bureaucrats and politicians), vote an incumbent government back into power. 5
The history of Make work programs Table 1: Legacy of CEPEP Type Programmes in T&T Table 1: Legacy of CEPEP Type Programmes in T&T Table 1: Legacy of CEPEP Type Programmes in T&T Table 1: Legacy of CEPEP Type Programmes in T&T Program Program Program Program When Attributes started Prime Prime Prime Prime Minister’s Minister’s Minister’s Minister’s 1950’s Objective: to provide short term employment opportunities to vulnerable people in T&T, and to Special Special Special Special Work Work Work Work curb the gang warfare in Port of Spain. Program Program Program Program Activities: Maintenance works (cleaning roads, cutting grass). Developmental Developmental Developmental Developmental 1960’s Objective: to provide work for persons with limited skills. Environmental Environmental Environmental Environmental Activities: Maintenance works (cleaning roads, cutting grass). Works Works Works Works Division Division Division Division The programme received widespread public criticism based on wastage of resources, ghost gangs (DEWD) (DEWD) and the negative impact on worker productivity. (DEWD) (DEWD) Labour Labour Intensive Intensive Objective: to provide short term employment opportunities to vulnerable people in T&T. Labour Labour Intensive Intensive 1988 Development Development Development Development LIDP replaced DEWD in terms of title but generally targeted the same cohort of persons as in Programme (LIDP) Programme Programme Programme (LIDP) (LIDP) (LIDP) DEWD, and continued to face the same economic challenges as regards efficiency. Unemployment Unemployment Unemployment Unemployment 1993 Objective: to provide short term employment opportunities to vulnerable people in T&T. The Relief Relief Relief Relief Program Program Program Program program seeks to reduce poverty, crime, high unemployment levels. (URP) (URP) (URP) (URP) Activities: The upgrade of physical and social infrastructure. Target population: unemployed nationals of Trinidad and Tobago seeking short term employment opportunities. The LIDP was essentially rebranded and continues to be criticized as a tool of political convenience. CEPEP CEPEP CEPEP CEPEP 2002 Objectives: to provide environmental protection, enhancement and beautification of environmental work areas (EWAs). Activities: provide employment opportunities to nationals in the areas of: Environmental Maintenance; Coastal Maintenance; Wetlands Maintenance; Disaster and Emergency Response (DERT); Dead Animal Removal (DART); Waste Removal. Target population: nationals of Trinidad and Tobago seeking short term employment opportunities. The original conceptualization of the program was that the intervention was targeted especially to single mothers. Programme is run in an environment where URP already exists and has been criticised for being a tool of political convenience and even more so for negatively impacting on worker ethic and productivity. 6 Source Source: Source Source : : James : James James James ( ( (2003 ( 2003 2003 2003) ) ); ) ; ; ; Bhagan Bhagan Bhagan Bhagan ( ( ( (2013 2013 2013 2013) ) ) ); ; ; ; Augustine Augustine ( Augustine Augustine ( (2014 ( 2014 2014 2014) ) ) )
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Output effects of the Make work program Output effects of the Make work program Output effects of the Make work program Output effects of the Make work program A B C D Tradeable Tradeable Tradeable Tradeable T 0 T 1 T 2 T 3 NBT NBT NBT 0 ↓ ↓ ≡ NBT NBT BT BT BT BT BT 0 ↑ ≡ ≡ NT NT NT NT NT 0 ↓ ↑ ↓ Make Make Make Make Work Work Work Work 0 0 ↑ ↓ Employment effect of the Make work program Employment effect of the Make work program Employment effect of the Make work program Employment effect of the Make work program BT BT BT BT BT LO ↑ ≡ ≡ NBT NBT NBT NBT NBT LO ↓ ↓↓ ≡ NT NT NT NT NT LO ↓ ↑ ↓ MW MW MW MW MW LO ↓ ↑ ≡ Current account balance (CAB) and Fiscal Balance (FB) Impact of make work programs Current account balance (CAB) and Fiscal Balance (FB) Impact of make work programs Current account balance (CAB) and Fiscal Balance (FB) Impact of make work programs Current account balance (CAB) and Fiscal Balance (FB) Impact of make work programs CAB CAB 0 ↑ 0 ↓ CAB CAB FB FB FB FB 0 ↑ 0 ↓↓ 8
Actual GDP current prices Actual GDP current prices Actual GDP current prices Actual GDP current prices Personal Services / GDP other GDP Manufacturing Other services (TT$mn) 134912.3 8288.8 2709.9 145911.4 2016 2016 2016 2016 GDP new with labour reshuffling GDP current prices GDP new with labour reshuffling GDP new with labour reshuffling GDP new with labour reshuffling GDP current prices GDP current prices GDP current prices 2016 2016 134912.3 9957.2 2426.7 147296.3 2016 2016 change 1384.9 9
CEPEP s a public good to help single female parents � a) parent child bond helps child to develop � b) there are studies which show that female headed households more likely to produce kids with criminal tendencies � c) is it possible to treat employment for single parent mothers as a public good. Required conditionalities: 1) signing kids homework notebooks as verified by a letter from the school teacher 2) attending family planning association meetings once every 3 months with a verifiable letter from the district health nurse 3) proof that their kids attended 75% of school time for the 3 months period prior to receiving a contract 4) males channelled into farmpep and other programs. 10
� Thank you � Questions and comments 11
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