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Impact of Rural Employment Guarantee Program on Farming Efficiency: Evidence from an Emerging Economy

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  • Chakraborty, Subarta
  • Mishra, Ashok K.
  • Yan, Hongqiang

Abstract

The paper examines whether participation in India’s Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) affects agricultural production's farm-level technical efficiency (TE). We employ a multi-stage empirical strategy using nationally representative farm household data, combining propensity score matching, stochastic frontier analysis (SFA), metafrontier estimation, and selectivity-corrected SFA models. Our results consistently show that participation in MGNREGA does not significantly impair technical efficiency. The average technical efficiency is comparable between participants and non-participants (~59%), and the differences in technology gap ratios and meta-technical efficiency are modest. While participants face a slightly wider technology gap, they exhibit marginally higher group-specific efficiency, suggesting effective input utilization within their technological constraints. Selectivity-corrected models further confirm that controlling for unobservable factors does not alter the core findings. The results challenge prevailing concerns about MGNREGA’s negative productivity spillovers and reinstate the importance of the public workforce program.

Suggested Citation

  • Chakraborty, Subarta & Mishra, Ashok K. & Yan, Hongqiang, 2025. "Impact of Rural Employment Guarantee Program on Farming Efficiency: Evidence from an Emerging Economy," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360648, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360648
    DOI: 10.22004/ag.econ.360648
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    1. Samuele Centorrino & María Pérez‐Urdiales & Boris Bravo‐Ureta & Alan Wall, 2024. "Binary endogenous treatment in stochastic frontier models with an application to soil conservation in El Salvador," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(3), pages 365-382, April.
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