IDEAS home Printed from https://ideas.repec.org/p/ags/aaea16/237345.html
   My bibliography  Save this paper

Disaggregated labor supply implications of guaranteed employment in India

Author

Listed:
  • Sheahan, Megan
  • Liu, Yanyan
  • Narayanan, Sudha
  • Barrett, Christopher B.

Abstract

How do household labor supply decisions change with the entry of a massive employment guarantee program? This paper explores the household level labor allocation effects – disaggregated by gender, age group, task, and season – associated with India’s Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) as specifically implemented in the state of Andhra Pradesh. Using three rounds of panel household survey data including 3,725 households combined with project administrative records, our results suggest that participation in the MGNREGS prompted an increase in overall household labor supply by about 13 days only in the summer slack labor season, mostly attributed to adult women. This expansion, though, is not large enough to evade “crowding out” of some labor previously offered to non-MGNREGS labor tasks, particularly private casual labor opportunities, and more so in the main agricultural seasons than the summer slack season. Despite overall labor displacement, women are found to increase their time spent on farm in the rabi agricultural season while men in a small number of surveyed households spend more time on migration labor activities in all three seasons studied. Time spent on paid and unpaid activities, including household chores, do not increase for youth and children in MGNREGS-participating households, suggesting no within-household substitution of labor towards younger members.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:aaea16:237345
    DOI: 10.22004/ag.econ.237345
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/237345/files/Sheahan%20Liu%20Narayanan%20Barrett_AAEA%202016.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.237345?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Diganta Mukherjee & Uday Bhanu Sinha, 2013. "Understanding NREGA: A Simple Theory and Some Facts," Springer Books, in: Natteri Siddharthan & Krishnan Narayanan (ed.), Human Capital and Development, edition 2, chapter 0, pages 103-128, Springer.
    2. Arnab Basu, 2013. "Impact of rural employment guarantee schemes on seasonal labor markets: optimum compensation and workers’ welfare," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 1-34, March.
    3. Gehrke, Esther, 2015. "Can public works infrastructure affect employment outcomes? Evidence from the NREGS in India," IDOS Discussion Papers 9/2015, German Institute of Development and Sustainability (IDOS).
    4. Datt, Gaurav & Ravallion, Martin, 1994. "Transfer Benefits from Public-Works Employment: Evidence for Rural India," Economic Journal, Royal Economic Society, vol. 104(427), pages 1346-1369, November.
    5. Ren Mu & Dominique van de Walle, 2011. "Rural Roads and Local Market Development in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 709-734.
    6. 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.
    7. Klaus Deininger & Yanyan Liu, 2013. "Evaluating Program Impacts on Mature Self-help Groups in India," The World Bank Economic Review, World Bank, vol. 27(2), pages 272-296.
    8. Tianshu Li & Sheetal Sekhri, 2020. "The Spillovers of Employment Guarantee Programs on Child Labor and Education," The World Bank Economic Review, World Bank, vol. 34(1), pages 164-178.
    9. Basu, Arnab K. & Chau, Nancy H. & Kanbur, Ravi, 2009. "A theory of employment guarantees: Contestability, credibility and distributional concerns," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 482-497, April.
    10. Songqing Jin & Yanyan Liu, 2013. "Welfare and Poverty Impacts of India’s National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh," Working Papers id:5530, eSocialSciences.
    11. Sheahan, Megan & Liu, Yanyan & Barrett, Christopher B. & Narayanan, Sudha, 2014. "The political economy of MGNREGS spending in Andhra Pradesh:," IFPRI discussion papers 1371, International Food Policy Research Institute (IFPRI).
    12. Bhargava, Anil K., 2013. "The Impact of India’s Rural Employment Guarantee on Demand for Agricultural Technology," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150163, Agricultural and Applied Economics Association.
    13. Agarwal, Sumit & Alok, Shashwat & Chopra, Yakshup & Tantri, Prasanna, 2021. "Government Employment Guarantee, Labor Supply, and Firms’ Reaction: Evidence from the Largest Public Workfare Program in the World," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(2), pages 409-442, March.
    14. Imbert, Clement & Papp, John, 2016. "Short-term Migration Rural Workfare Programs and Urban Labor Markets - Evidence from India," Economic Research Papers 269578, University of Warwick - Department of Economics.
    15. Jalan, Jyotsna & Ravallion, Martin, 1998. "Are there dynamic gains from a poor-area development program?," Journal of Public Economics, Elsevier, vol. 67(1), pages 65-85, January.
    16. Zimmermann, Laura V, 2012. "Labor Market Impacts of a Large-Scale Public Works Program: Evidence from the Indian Employment Guarantee Scheme," IZA Discussion Papers 6858, Institute of Labor Economics (IZA).
    17. Karthik Muralidharan & Paul Niehaus & Sandip Sukhtankar, 2023. "General Equilibrium Effects of (Improving) Public Employment Programs: Experimental Evidence From India," Econometrica, Econometric Society, vol. 91(4), pages 1261-1295, July.
    18. Afridi, Farzana & Mukhopadhyay, Abhiroop & Sahoo, Soham, 2012. "Female Labour Force Participation and Child Education in India: The Effect of the National Rural Employment Guarantee Scheme," IZA Discussion Papers 6593, Institute of Labor Economics (IZA).
    19. Sakketa, Tekalign Gutu & von Braun, Joachim, 2019. "Labor-intensive public works programs in sub-Saharan Africa: Experiences and implications for employment policies," Working Papers 290416, University of Bonn, Center for Development Research (ZEF).
    20. Nancy Chau & Ravi Kanbur & Yu Qin, 2014. "Do public work schemes deter or encourage outmigration? Empirical evidence from China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    21. Chen, Shaohua & Mu, Ren & Ravallion, Martin, 2009. "Are there lasting impacts of aid to poor areas?," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 512-528, April.
    22. Maiorano, Diego, 2014. "The Politics of the Mahatma Gandhi National Rural Employment Guarantee Act in Andhra Pradesh," World Development, Elsevier, vol. 58(C), pages 95-105.
    23. Richard K. Crump & V. Joseph Hotz & Guido W. Imbens & Oscar A. Mitnik, 2006. "Moving the Goalposts: Addressing Limited Overlap in the Estimation of Average Treatment Effects by Changing the Estimand," NBER Technical Working Papers 0330, National Bureau of Economic Research, Inc.
    24. Karthik Muralidharan & Paul Niehaus & Sandip Sukhtankar, 2016. "Building State Capacity: Evidence from Biometric Smartcards in India," American Economic Review, American Economic Association, vol. 106(10), pages 2895-2929, October.
    25. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    26. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, July.
    27. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
    28. Gehrke, Esther & Hartwig, Renate, 2015. "How can public works programmes create sustainable employment?," IDOS Discussion Papers 11/2015, German Institute of Development and Sustainability (IDOS).
    29. Deininger, Klaus & Liu, Yanyan, 2019. "Heterogeneous welfare impacts of National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh, India," World Development, Elsevier, vol. 117(C), pages 98-111.
    30. Deininger, Klaus & Liu, Yanyan, 2013. "Welfare and poverty impacts of India's national rural employment guarantee scheme : evidence from Andhra Pradesh," Policy Research Working Paper Series 6543, The World Bank.
    31. Bipasha Maity, 2020. "Consumption and Time-Use Effects of India’s Employment Guarantee and Women’s Participation," Economic Development and Cultural Change, University of Chicago Press, vol. 68(4), pages 1185-1231.
    32. Clément Imbert & John Papp, 2015. "Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 233-263, April.
    33. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    34. Khera, Reetika (ed.), 2011. "The Battle for Employment Guarantee," OUP Catalogue, Oxford University Press, number 9780198070627.
    35. Farzana Afridi & Abhiroop Mukhopadhyay & Soham Sahoo, 2016. "Female labor force participation and child education in India: evidence from the National Rural Employment Guarantee Scheme," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-27, December.
    36. Ravi, Shamika & Engler, Monika, 2015. "Workfare as an Effective Way to Fight Poverty: The Case of India’s NREGS," World Development, Elsevier, vol. 67(C), pages 57-71.
    37. Azam, Mehtabul, 2012. "The Impact of Indian Job Guarantee Scheme on Labor Market Outcomes: Evidence from a Natural Experiment," IZA Discussion Papers 6548, Institute of Labor Economics (IZA).
    38. Upasak Das, 2015. "Rationing and Accuracy of Targeting in India: The Case of the Rural Employment Guarantee Act," Oxford Development Studies, Taylor & Francis Journals, vol. 43(3), pages 361-378, September.
    39. Arthur Alik-Lagrange & Martin Ravallion, 2015. "Inconsistent Policy Evaluation: A Case Study for a Large Workfare Program," NBER Working Papers 21041, National Bureau of Economic Research, Inc.
    40. Deininger, Klaus & Liu, Yanyan, 2013. "Economic and Social Impacts of an Innovative Self-Help Group Model in India," World Development, Elsevier, vol. 43(C), pages 149-163.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deininger, Klaus & Liu, Yanyan, 2019. "Heterogeneous welfare impacts of National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh, India," World Development, Elsevier, vol. 117(C), pages 98-111.
    2. Merfeld, Joshua D, 2017. "Spatially Heterogeneous Effects of a Public Works Program," MPRA Paper 80630, University Library of Munich, Germany.
    3. Gehrke, Esther & Hartwig, Renate, 2018. "Productive effects of public works programs: What do we know? What should we know?," World Development, Elsevier, vol. 107(C), pages 111-124.
    4. Merfeld, Joshua D., 2019. "Spatially heterogeneous effects of a public works program," Journal of Development Economics, Elsevier, vol. 136(C), pages 151-167.
    5. Parmar, Divya & Banerjee, Aneesh, 2019. "Impact of an employment guarantee scheme on utilisation of maternal healthcare services: Results from a natural experiment in India," Social Science & Medicine, Elsevier, vol. 222(C), pages 285-293.
    6. Misra, Kartik, 2019. "Does historical land inequality attenuate the positive impact of India’s employment guarantee program?," World Development, Elsevier, vol. 124(C), pages 1-1.
    7. Jules Gazeaud & Victor Stephane, 2023. "Productive Workfare? Evidence from Ethiopia's Productive Safety Net Program," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 265-290, January.
    8. 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.
    9. Klonner, Stefan & Oldiges, Christian, 2022. "The welfare effects of India’s rural employment guarantee," Journal of Development Economics, Elsevier, vol. 157(C).
    10. Berg, Erlend & Bhattacharyya, Sambit & Rajasekhar, D. & Manjula, R., 2018. "Can public works increase equilibrium wages? Evidence from India’s National Rural Employment Guarantee," World Development, Elsevier, vol. 103(C), pages 239-254.
    11. Deininger, Klaus & Nagarajan, Hari K & Singh, Sudhir K, 2020. "Women's political leadership and economic empowerment: Evidence from public works in India," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 277-291.
    12. Bose, Nayana, 2017. "Raising Consumption Through India’s National Rural Employment Guarantee Scheme," World Development, Elsevier, vol. 96(C), pages 245-263.
    13. Manisha Shah & Bryce Millett Steinberg, 2021. "Workfare and Human Capital Investment: Evidence from India," Journal of Human Resources, University of Wisconsin Press, vol. 56(2), pages 380-405.
    14. Karthik Muralidharan & Paul Niehaus & Sandip Sukhtankar, 2023. "General Equilibrium Effects of (Improving) Public Employment Programs: Experimental Evidence From India," Econometrica, Econometric Society, vol. 91(4), pages 1261-1295, July.
    15. Das, Ritanjan & Dey, Subhasish & Neogi, Ranjita, 2021. "Across the stolen Ponds: The political geography of social welfare in rural eastern India," World Development, Elsevier, vol. 146(C).
    16. Rodriguez, Zachary, 2022. "The power of employment: Effects of India’s employment guarantee on women empowerment," World Development, Elsevier, vol. 152(C).
    17. Klonner, Stefan & Oldiges , Christian, 2014. "Safety Net for India's Poor or Waste of Public Funds? Poverty and Welfare in the Wake of the World's Largest Job Guarantee Program," Working Papers 0564, University of Heidelberg, Department of Economics.
    18. Alik-Lagrange, Arthur & Buehren, Niklas & Goldstein, Markus & Hoogeveen, Johannes, 2023. "Welfare impacts of public works in fragile and conflict affected economies: The Londö public works in the Central African Republic," Labour Economics, Elsevier, vol. 81(C).
    19. Bahal, G. & Shrivastava, A., 2016. "Labor Market Effects of Inconsistent Policy Interventions: Evidence from India’s Employment Guarantees," Cambridge Working Papers in Economics 1669, Faculty of Economics, University of Cambridge.
    20. Bagga,Aanchal & Holmlund,Marcus Erik & Khan,Nausheen & Subha,Mani & Mvukiyehe,Eric & Premand,Patrick, 2023. "Do Public Works Programs Have Sustained Impacts ? A Review of Experimental Studies from LMICs," Policy Research Working Paper Series 10471, The World Bank.

    More about this item

    Keywords

    Agricultural and Food Policy; Labor and Human Capital;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea16:237345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.