A Friend Indeed: Does the Use of Biometric Digital Identity Make Welfare Programs Counter Cyclical?

Abstract

We examine the responsiveness of the world's largest workfare program to distress and ask whether a techno-administrative intervention involving biometric digital identity enabled direct transfer of benefits makes any difference. Wage payment delays, which where high before the intervention, reduce significantly after the intervention. In line with the thesis that delays are more costly and their reduction more beneficial during distress, we find a reduction in demand and supply of jobs during times of economic stress in the pre-intervention period and an increase in demand and supply of jobs during times of economic stress in the post intervention period.