Can Public Employment Schemes Increase Equilibrium Wages? Evidence from a Natural Experiment in India

Erlend Berg, Sambit Bhattacharyya, R Rajasekhar and R Manjula ()

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: We estimate the impact of the Indian government’s major rural public works programme, the National Rural Employment Guarantee (NREG), on agricultural wages. The rollout of NREG in three phases is used to identify difference-in-difference estimates of the programme effect. Using monthly wage data from the period 2000-2011 for a panel of 209 districts across 18 Indian states, we find that on average NREG boosts the growth rate of real daily agricultural wages 4.8 per cent per year. The effect is concentrated in some states and in the agricultural season. The effect appears to be gender-neutral and biased towards unskilled labour. We argue that rural public employment programmes constitute a potentially important anti-poverty policy tool.

Keywords: public works; workfare; agricultural wages; NREG; India (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-01
New Economics Papers: this item is included in nep-agr and nep-dev
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:14/317

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