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Does the employment guarantee scheme stabilize household incomes in rural India?

  • Pasquale Scandizzo
  • Raghav Gaiha
  • Katsushi Imai

Our analysis, based on the ICRISAT panel survey of villages in the semi-arid region of south India, confirms the income stabilizing effect of the Employment Guarantee Scheme in India. Variability of household income is measured by an unconditional variance of residuals of an income equation. A (variant) of Heckman's sample selection model is employed to allow for the endogeneity of EGS participation and to assess its income stabilizing role. The (instrumented) EGS participation reduces the residual variance of household income, implying consequent income stabilization.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 16 (2009)
Issue (Month): 12 ()
Pages: 1221-1225

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Handle: RePEc:taf:apeclt:v:16:y:2009:i:12:p:1221-1225
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  1. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  2. 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.
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