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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 nighttime lights, a proxy for economic development, and banking deposits using the staggered program rollout for identification. We find consistent and robust evidence that NREGS increased aggregate economic output by 1% to 2% per capita measured by nighttime 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.

Suggested Citation

  • C. Justin Cook & Manisha Shah, 2022. "Aggregate Effects from Public Works: Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 797-806, October.
    • Handle: RePEc:tpr:restat:v:104:y:2022:i:4:p:797-806
    DOI: 10.1162/rest_a_00993
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    Cited by:

    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. Xiao Han & Hanyang Wang & Xia Du, 2024. "The impact of long‐term care insurance on the utilization of inpatient service: Evidence and mechanisms in China," Health Economics, John Wiley & Sons, Ltd., vol. 33(12), December.
    4. Weijun Lu & Ziyi Jin, 2025. "The Effect of Ecological Fiscal Transfers on Child Mortality: Evidence From China," Health Economics, John Wiley & Sons, Ltd., vol. 34(12), pages 2169-2181, December.
    5. 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.
    6. Hu, Wen-Quan & Fang, Jiewei, 2025. "Green credit and firms’ emission reduction performance: Evidence from China," World Development, Elsevier, vol. 194(C).
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    8. repec:osf:socarx:ejb8x_v1 is not listed on IDEAS
    9. Yuan, Bozong & Zhang, Xinzhi, 2025. "Restoring inland prosperity: The impact of the New International Land-Sea Corridor on corporate internationalization and regional wealth gaps," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    10. 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.
    11. Dickinson, Jeffrey, 2020. "Planes, Trains, and Automobiles: What Drives Human-Made Light?," MPRA Paper 103504, University Library of Munich, Germany.
    12. Lyubing, Feng & Lijun, Zang & Xianguo, Yao, 2024. "The impact of internet use on entrepreneurial behavior and income: Evidence from Chinese rural households," Journal of Asian Economics, Elsevier, vol. 93(C).
    13. Wen-Quan Hu & Jingyu Zhao & Lexin Zhao, 2023. "Does enhancing environmental regulation promote corporate green investment? Evidence from China," Energy & Environment, , vol. 34(8), pages 3265-3291, December.
    14. Aanchal Bagga & Marcus Holmlund & Nausheen Khan & Subha Mani & Eric Mvukiyehe & Patrick Premand, 2026. "Do Public Works Programs Have Sustained Impacts? A Review of Experimental Studies from LMICs," The World Bank Research Observer, World Bank, vol. 41(1), pages 1-38.
    15. Eynde, Oliver Vanden & Wren-Lewis, Liam, 2024. "Complementarities in Infrastructure: Evidence from Indian Agriculture," SocArXiv ejb8x, Center for Open Science.
    16. Liu, Minghao & Xu, Kun & Zhai, Lihong, 2024. "Bank-firm common ownership, green credit and enterprise green technology innovation: Evidence from Chinese credit markets," Energy Economics, Elsevier, vol. 140(C).
    17. Xu, Yanhui & Deng, Fuhua & Feng, Qianbin, 2025. "The effect of tax enforcement digitalization on corporate digital transformation: Evidence from China's listed companies," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1105-1134.
    18. Chanda, Areendam & Cook, C. Justin, 2022. "Was India’s demonetization redistributive? Insights from satellites and surveys," Journal of Macroeconomics, Elsevier, vol. 73(C).
    19. 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).
    20. Zang, Zhenjie & Zhang, Xinzhi, 2025. "Unlocking firm productivity: The impact of mineral resource abundance on total factor productivity in China," Finance Research Letters, Elsevier, vol. 86(PF).
    21. Liu, Duan & Peng, Liyun & Wang, Qiuhong & Wan, Hong & Yu, Nizhou, 2025. "Water resources tax and corporate R&D strategies: Policy effects on innovation investment and collaboration preference," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 2276-2298.
    22. Hu, Wen-Quan & Su, Yunqing & Fang, Hongsheng, 2025. "Constraints and incentives: Promoting air pollution governance through performance evaluation system," Journal of Asian Economics, Elsevier, vol. 98(C).
    23. Ohnsorge, Franziska Lieselotte & Rogerson,Richard & Xie, Zoe Leiyu, 2024. "Jobless Development," Policy Research Working Paper Series 10928, The World Bank.
    24. Sarma, Nayantara, 2022. "Domestic violence and workfare: An evaluation of India’s MGNREGS," World Development, Elsevier, vol. 149(C).

    More about this item

    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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