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Estimating the Impact of Welfare Programs on Agricultural Output: Evidence from India

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  • Girish Bahal

Abstract

Rural welfare programs are implemented for a variety of reasons. However, of key importance is to understand how government spending under such programs affects local agricultural output which is a key measure of economic activity in developing economies. This article estimates the local multiplicative effects of transfer spending by the government using a novel data‐set of state‐level expenditure under rural welfare programs in India. Using government records as narrative evidence, I use the motivation to implement new programs at the national level to construct changes in transfer spending that are largely exogenous to fluctuations in agricultural output at the state level. I estimate local multipliers using this “narrative shock series” and find government transfers to be quite consequential for local economic activity.

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  • Girish Bahal, 2020. "Estimating the Impact of Welfare Programs on Agricultural Output: Evidence from India," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 982-998, May.
    • Handle: RePEc:wly:ajagec:v:102:y:2020:i:3:p:982-998
    DOI: 10.1093/ajae/aaz030
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    Cited by:

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    2. Girish Bahal & Anand Shrivastava, 2022. "Fiscal transfers and inflation: evidence from India," Empirical Economics, Springer, vol. 63(4), pages 1837-1858, October.
    3. Sowmya Dhanaraj & Vidya Mahambare & Pragati, 2021. "Are India’s farm debt waivers a political tool that impacts government finances?," Working Papers 2021-211, Madras School of Economics,Chennai,India.
    4. Narayan Chandra Nayak & Bimal Kishore Sahoo & Mamata Jenamani & Alok Ranjan Mohanty & Runa Sen Chatterjee, 2021. "Does Convergence of Rural Development Schemes Improve Household Welfare? An Investigation of Mahatma Gandhi National Rural Employment Guarantee Act in Odisha, India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(4), pages 1023-1042, December.

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