Publication: Short-Term Effects of India's Employment Guarantee Program on Labor Markets and Agricultural Productivity
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2016-05
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2016-06-13
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This paper uses a large national household panel from 1999/2000 and 2007/08 to analyze the short-term effects of India's Mahatma Gandhi National Rural Employment Guarantee Scheme on wages, labor supply, agricultural labor use, and productivity. The scheme prompted a 10-point wage increase and higher labor supply to nonagricultural casual work and agricultural self-employment. Program-induced drops in hired labor demand were more than outweighed by more intensive use of family labor, machinery, fertilizer, and diversification to crops with higher risk-return profiles, especially by small farmers. Although the aggregate productivity effects were modest, total employment generated by the program (but not employment in irrigation-related activities) significantly increased productivity, suggesting alleviation of liquidity constraints and implicit insurance provision rather than quality of works undertaken as a main channel for program-induced productivity effects.
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“Nagarajan, Hari K.; Deininger, Klaus; Singh, Sudhir K.. 2016. Short-Term Effects of India's Employment Guarantee Program on Labor Markets and Agricultural Productivity. Policy Research Working Paper;No. 7665. © World Bank. http://hdl.handle.net/10986/24502 License: CC BY 3.0 IGO.”
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