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Aggregate Effects from Public Works: Evidence from India

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  • C. Justin Cook
  • Manisha Shah

Abstract

This paper explores the aggregate economic effects from India's National Rural Employment Guarantee Scheme (NREGS), which provides up to 100 days of labor to rural laborers at the mandated minimum wage. We examine the within-district change to night-time lights and banking deposits using the staggered program rollout for identification. We find consistent and robust evidence that NREGS increased aggregate economic output by 1-2% per capita measured by night-time lights. This effect, however, is not equal across districts. We observe no positive effect of the program in poorer districts, illuminating an important source of heterogeneity.

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  • C. Justin Cook & Manisha Shah, 2020. "Aggregate Effects from Public Works: Evidence from India," NBER Working Papers 27395, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27395
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    1. 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.
    2. Xu, Yibin & Chen, Zhibin & Fan, Rui, 2023. "Highly skilled foreign labor introduction policies and corporate innovation: Evidence from a natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 137-156.
    3. Teevrat Garg & Ajay Shenoy, 2021. "The Ecological Impact of Place‐Based Economic Policies," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1239-1250, August.
    4. Dickinson, Jeffrey, 2020. "Planes, trains, and automobiles: what drives human-made light?," MPRA Paper 117126, University Library of Munich, Germany.
    5. Pushkar Maitra & William Yu, 2021. "The Long Shadow of Infrastructure Development: Long Run Effects of Railway Construction in Colonial India," Monash Economics Working Papers 2021-01, Monash University, Department of Economics.
    6. 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.
    7. Chanda, Areendam & Cook, C. Justin, 2022. "Was India’s demonetization redistributive? Insights from satellites and surveys," Journal of Macroeconomics, Elsevier, vol. 73(C).
    8. Chen, Lifeng & Wang, Kaifeng, 2022. "The spatial spillover effect of low-carbon city pilot scheme on green efficiency in China's cities: Evidence from a quasi-natural experiment," Energy Economics, Elsevier, vol. 110(C).
    9. Sarma, Nayantara, 2022. "Domestic violence and workfare: An evaluation of India’s MGNREGS," World Development, Elsevier, vol. 149(C).

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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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