Labor market impacts of water conservation under a national-scale public works program in India

This study evaluates the causal impact of farm pond construction under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on rural employment outcomes at the Gram Panchayat (GP) level across India. Using a fixed effects panel regression model following Propensity Score Matching (PSM), we estimate the treatment effects on total household employment, Scheduled Caste (SC) employment, Scheduled Tribe (ST) employment, and women’s employment. Results indicate that farm pond construction generates a statistically significant increase of approximately 100 person-days in annual employment per GP. While SC and ST households experience positive employment gains, the magnitude is notably smaller than that observed for the general population, highlighting persistent inequalities in program reach. A significant increase in women’s employment (~74 households) suggests that local and flexible MGNREGA worksites play a crucial role in promoting female labor force participation. Control variables—such as household engagement in farming, irrigated area, presence of high schools, and internal pucca roads—exhibit strong associations with employment outcomes, indicating that the effectiveness of farm pond interventions is conditioned by local socio-economic and infrastructural contexts. GPs with higher agricultural activity and irrigation potential show greater employment gains, while better educational infrastructure is associated with reduced dependence on public employment schemes. The presence of pucca roads significantly enhances employment among SC/ST populations, emphasizing the role of connectivity in accessing rural worksites. These findings underscore the need for a place-based approach in public works planning and reinforce the role of natural resource management assets in inclusive rural development.