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The labor market is the main channel through which economic growth affects poverty. This paper is the first empirical account of main channels through which the growth in transition period has affected labor market and living standards in Georgia. It is based on both the official aggregate statistics and data from a representative household survey fielded in 1996-1997. The paper finds that in Georgia the labor market has shown outstanding flexibility during a period of severe political and economic turmoil in 1992-1995. Despite the catastrophic fall in GDP employment contracted only marginally. This flexibility has been achieved mainly through the informalization of employment, and through the reallocation of labor towards small-scale agriculture. Informalization has dampened the impact of the crisis and served to protect the poor, stabilizing the poverty rate at the politically and socially acceptable level (around 15% of the population). However, the informalization limited the impact of market forces favoring human capital accumulation on the formation of earnings. Today, a large and growing fraction of the Georgian labor force relies on self-employment as the primary means to earn an income. For some, this is an avenue for earnings mobility and growth; for the majority, however, selfemployment remains constrained to low-productivity agricultural or trading activities, with little earnings stability and little potential for long term earnings growth. Prospects for the future hinge critically on the economy?s ability to generate new private formal employment, and to reallocate labor away from these low-productivity activities into higher value added sectors.

This note provides guidance to policy makers who are looking to utilize Social Safety Nets (SSNs) to mitigate the welfare impacts of energy subsidy reforms (ESRs) on the poor. The good practice note explains (a) why SSNs are an effective tool in the context of ESR, and (b) different options for rapid scale-up or implementation of SSNs. It introduces a three-stage analytical approach that includes (a) assessing the welfare losses caused by ESR; (b) taking stock of existing SSN and near-SSNs, and modeling expansion options; and (c) assessing the readiness of the existing or planned SSNs for providing protection against the negative consequences of the price shock. The scope of this good practice note is confined to cases where ESRs lead to higher prices paid by energy consumers. As good practice note one outlines, ESRs do not necessarily lead to higher prices, and could even decrease prices paid, such as when producer subsidies in the form of price support paid for by consumers are eliminated, or when consumer price subsidies lead to illegal diversion and out-smuggling, acute fuel shortages, and prices that are even higher than official prices on the black markets. The latter is particularly important: consumers may be paying much higher prices before the reform, having to develop coping mechanisms to deal with energy shortages. ESRs may improve the quality of energy delivery service, reducing energy shortages and thereby improving the welfare of energy consumers. In this context, the note has been prepared for social protection specialists and government officials responsible for social sectors portfolio. It provides an overview and guidance on the use of tools, principles, methods, and practices, in the analysis of social protection issues relevant to ESR. The note has a narrow focus, specifically looking at SSNs as measures that can support the poor during times of ESR.

The paper provides an up-to date and selective review of the literature on how social safety nets contribute to growth. The evidence is carefully chosen to show how safety nets have the potential to overcome constraints on growth linked to market failures, and is organized into four distinct pathways: i) encouraging asset accumulation by changing incentives and by addressing imperfections in financial markets caused by constraints in obtaining credit, and from information asymmetries; overcoming such failures helps households to invest into their human capital or productive assets; ii) failures in insurance markets especially in low income setting; safety nets are assisting in managing risk both ex post and ex ante; iii) safety nets are overcoming failure to create assets and other local economy complementary factors to household-level investments; iv) safety nets are shown to relax political constraints on policy. Safety nets have a dual objective of directly alleviating poverty through transfers to the poor and of triggering higher growth for the poor. However, the trade-off between the dual objectives of equity and growth is not eliminated by the potential for productive safety nets; this remains critical for designing social policies.

AbstractIn this paper we use data from a large nationally representative survey in Russia to empirically estimate the distribution of the burden induced by the military draft. We focus on draft avoidance as a common response to the conscription system ridden by corruption. We develop a simple theoretical model that describes household compliance decisions with respect to enlistment as a function of its pre‐draft welfare. We employ the full information maximum‐likelihood instrumental variable model to estimate the effect of household characteristics on the probability of serving in the army. Our results indicate that the burden of conscription falls excessively on the poor. Poor, low‐educated, rural households are much more likely to have their sons enlisted compared to urban, wealthy and better‐educated families. Using the predicted probability of draft avoidance, we estimate the short‐term direct economic cost of the draft as lost wages of serving conscripts. Our results suggest that losses incurred by the poor are disproportionately large and exceed the statutory rates of personal income taxes.

This book addresses the thorny and fascinating question of how food and voucher programs, despite theory and evidence generally favoring cash, remain relevant, have evolved, and, in most circumstances, have improved over time. In doing so, we take an evolutionary and pragmatic view; we are interested in understanding why food-based programs exist and how countries can benefit from transformations such as that of Chhattisgarh, not in determining whether those programs should exist

"....a most interesting report. I have read it with considerable interest, and have learned a lot. It tells a clear story, and it contains a lot of interesting material."- Anthony Atkinson, Professor Nuffield CollegeOxford University, United Kingdom "The key conclusion of the report is that rapid economic growth is fundamentally important for job creation and, consequently, reducing poverty."- Ewa Balcerowicz, President of the BoardCenter for Social and Economic Research, Warsaw, Poland While the countries of Eastern Europe and the Former Soviet Union have made significant

IFPRI3; ISI; CRP2; B.1 Integrated Agriculture, Nutrition, and Health Programs and Policies; E Building Resilience ; PHND; PIM ; PR ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)

Contrary to popular perception, Russia entered the transition with significant inequality. Using the large Russian Longitudinal Monitoring Survey dataset, we demonstrate that inequality has subsequently risen yet further and by end‐1996 was roughly comparable to inequality in Mexico, Colombia or Malaysia. Driving this increase has been not only wealth transfers through privatization but also changes in government expenditure and a sharp growth in earnings dispersion. There has been a large, associated shift in the structure of income. The paper also looks at the incidence and depth of poverty over the period 1992‐96. At the start of transition, roughly half the population of households fell below the poverty line. While this has subsequently declined, at end‐1996 nearly 40 per cent of households were below the poverty line and a substantial stratum of households were locked in chronic poverty.