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The welfare effects of India’s rural employment guarantee

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  • Klonner, Stefan
  • Oldiges, Christian

Abstract

We assess the welfare effects of India’s workfare program NREGA using a novel, almost sharp regression discontinuity design. We find large seasonal consumption increases in states implementing the program intensely, which are a multiple of the direct income gains. We also find increases in adolescents’ schooling. Our results imply substantial beneficial indirect effects of this large welfare program. We conclude that public employment programs hold significant potential for reducing poverty and insuring households against various adverse implications of seasonal income shortfalls — when properly implemented.

Suggested Citation

  • Klonner, Stefan & Oldiges, Christian, 2022. "The welfare effects of India’s rural employment guarantee," Journal of Development Economics, Elsevier, vol. 157(C).
  • Handle: RePEc:eee:deveco:v:157:y:2022:i:c:s0304387822000256
    DOI: 10.1016/j.jdeveco.2022.102848
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    More about this item

    Keywords

    Public works; Employment program; Social welfare programs; Poverty alleviation; Safety net; Labor markets; Poverty; Schooling; Child labor; India;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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