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

Subarta Chakraborty, Ashok K. Mishra and Hongqiang Yan

No 360648, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

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.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 29
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360648

DOI: 10.22004/ag.econ.360648

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