Political Reservations, Access to Water and Welfare Outcomes: Evidence from Indian Villages

In a developing economy with an ethnically diverse society, such as India's, household welfare and its distribution within the household unambiguously depend on how much time each member of the household spends on productive activity. In this paper we examine the welfare impact of reducing the time spent by members of households, particularly women, through political reservations in rural India. Using a unique data set we find that (i) Political reservations and the ability of women to participate in the process of governance contribute to household welfare by allowing women to participate in labor markets, essentially because provision of public goods and in particular water, increases the productivity of household labor time. (ii) The concomitant decline in household work and increase in labor market participation is a robust indicator of increased productivity of household labor time being translated into productive work. In particular women participate in self employment and on cultivation. The effect on household incomes caused by members engaged in self-employment activities and own-cultivation is higher compared to effects caused by participation in off-farm wage labor. (iii) Further, our results are robust to the inclusion of residential location, access to credit, and shocks.