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The Impact of MGNREGA on Agricultural Outcomes and the Rural Labour Market: A Matched DID Approach

Author

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  • Deepak Varshney

    (International Food Policy Research Institute, South Asia Office)

  • Deepti Goel

    (University of Delhi)

  • J. V. Meenakshi

    (University of Delhi)

Abstract

This paper attempts to address the impact of the MGNREGA on the rural agricultural sector, focusing on cropping patterns, irrigated area, crop yields, wages and rural employment. The analysis is based on two data sources: the first is a unique district-season level panel dataset that we construct using multiple sources, and the second is unit record data from the NSS Employment Unemployment Surveys. To identify causal effects, we employ a difference-in-difference matching procedure, where districts are matched based on propensity scores; the use of propensity scores represents a novel aspect of this paper. We also examine pre-programme trends for each outcome variable to provide a check on the validity of our estimates. Our results indicate modest changes in cropping patterns that are state and period specific; however, they do not indicate any improvements in crop yields that were expected given the MGNREGA’s focus on investments in irrigation, although there is some evidence that irrigated area may have expanded after a lag. We also find that there is no systematic evidence of impact on wages and therefore no evidence that public works employment in MGNREGA crowded out casual labour in agriculture.

Suggested Citation

  • Deepak Varshney & Deepti Goel & J. V. Meenakshi, 2018. "The Impact of MGNREGA on Agricultural Outcomes and the Rural Labour Market: A Matched DID Approach," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(4), pages 589-621, December.
    • Handle: RePEc:spr:ijlaec:v:61:y:2018:i:4:d:10.1007_s41027-019-0151-x
    DOI: 10.1007/s41027-019-0151-x
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    Cited by:

    1. Varun Kumar Das & A. Ganesh Kumar, 2017. "Drivers of Farmers' Income: The Role of Farm Size and Diversification," Working Papers id:12104, eSocialSciences.
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    3. Varun Kumar Das & A. Ganesh-Kumar, 2018. "Farm size, livelihood diversification and farmer’s income in India," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(2), pages 185-201, June.
    4. Sheahan, Megan & Liu, Yanyan & Narayanan, Sudha & Barrett, Christopher B., 2015. "Disaggregated labor supply implications of guaranteed employment in India," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 237345, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    MGNREGA; Public works; Agriculture; Employment;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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