The Impact of Indian Job Guarantee Scheme on Labor Market Outcomes: Evidence from a Natural Experiment
AbstractPublic works programs, aimed at building a strong social safety net through redistribution of wealth and generation of meaningful employment, are becoming increasingly popular in developing countries. The National Rural Employment Guarantee Act (NREGA), enacted in August 2005, is one such program in India. This paper assesses causal impacts (Intent-to-Treat) of NREGA on public works participation, labor force participation, and real wages of casual workers by exploiting its phased implementation across Indian districts. Using nationally representative data from Indian National Sample Surveys (NSS) and Difference-in-Difference framework, we find that there is a strong gender dimension to the impacts of NREGA: it has a positive impact on the labor force participation and this impact is mainly driven by a much sharper impact on female labor force participation. Similarly, NREGA has a significant positive impact on the wages of female casual workers-real wages of female casual workers increased 8% more in NREGA districts compared with the increase experienced in non-NREGA districts. However, the impact of NREGA on wages of casual male workers has only been marginal (about 1%). Using data from pre-NREGA period, we also perform falsification exercise to demonstrate that the main conclusions are not confounded by pre-existing differential trends between NREGA and non-NREGA districts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6548.
Length: 37 pages
Date of creation: May 2012
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-22 (All new papers)
- NEP-LAB-2012-05-22 (Labour Economics)
- NEP-LMA-2012-05-22 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hoddinott, John & Skoufias, Emmanual, 2003.
"The impact of Progresa on food consumption,"
150, International Food Policy Research Institute (IFPRI).
- 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.
- Basu, Arnab K. & Chau, Nancy H. & Kanbur, Ravi, 2006. "A Theory of Employment Guarantees: Contestability, Credibility and Distributional Concerns," Working Papers 127048, Cornell University, Department of Applied Economics and Management.
- Basu, Arnab K. & Chau, Nancy & Kanbur, Ravi, 2007. "A Theory of Employment Guarantees: Contestability, Credibility and Distributional Concerns," IZA Discussion Papers 3002, Institute for the Study of Labor (IZA).
- Basu, Arnab K & Chau, Nancy H & Kanbur, Ravi, 2006. "A Theory of Employment Guarantees: Contestability, Credibility and Distributional Concerns," CEPR Discussion Papers 5784, C.E.P.R. Discussion Papers.
- David Cutler & Winnie Fung & Michael Kremer & Monica Singhal & Tom Vogl, 2010. "Early-Life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 72-94, April.
- Imbens, Guido & Wooldridge, Jeffrey M., 2009. "Recent Developments in the Econometrics of Program Evaluation," Scholarly Articles 3043416, Harvard University Department of Economics.
- Brian Bell & Richard Blundell & John Reenen, 1999.
"Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies,"
International Tax and Public Finance,
Springer, vol. 6(3), pages 339-360, August.
- Brian Bell & Richard Blundell & John Van Reenen, 1999. "Getting the unemployed back to work: the role of targeted wage subsidies," IFS Working Papers W99/12, Institute for Fiscal Studies.
- Datt, Gaurav & Ravallion, Martin, 1994. "Transfer Benefits from Public-Works Employment: Evidence for Rural India," Economic Journal, Royal Economic Society, vol. 104(427), pages 1346-69, November.
- Staubli, Stefan, 2011.
"The impact of stricter criteria for disability insurance on labor force participation,"
Journal of Public Economics,
Elsevier, vol. 95(9-10), pages 1223-1235, October.
- Staubli, Stefan, 2011. "The impact of stricter criteria for disability insurance on labor force participation," Journal of Public Economics, Elsevier, vol. 95(9), pages 1223-1235.
- Zimmermann, Laura, 2012. "Labor Market Impacts of a Large-Scale Public Works Program: Evidence from the Indian Employment Guarantee Scheme," IZA Discussion Papers 6858, Institute for the Study of Labor (IZA).
- Clément Imbert & John Papp, 2013.
"Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee,"
CSAE Working Paper Series
2013-03, Centre for the Study of African Economies, University of Oxford.
- Clement Imbert & John Papp, 2013. "Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee," Economics Series Working Papers WPS/2013-03, University of Oxford, Department of Economics.
- Imbert, Clément, 2013. "Travailler pour être aidé? L’emploi garanti en Inde," Opuscules du CEPREMAP, CEPREMAP, number 33.
- Bhargava, Anil, 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.
- 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.
- Liu, Yanyan & Barrett, Christopher B., 2012. "Heterogeneous proâ€“poor targeting in Indiaâ€™s Mahatma Gandhi National Rural Employment Guarantee Scheme:," IFPRI discussion papers 1218, International Food Policy Research Institute (IFPRI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.