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Why Guarantee Employment? Evidence from a Large Indian Public-Works Program

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  • Laura V. Zimmermann

Abstract

Most countries implement safety net programs for poor households. A widespread concern is that such programs crowd out private-sector jobs, but they could also affect workers’ job choice. This paper analyzes the first-year employment impacts of the world’s largest public-works program, India’s National Rural Employment Generation Scheme (NREGS), using a novel regression-discontinuity design. It focuses on districts treated in phase 2 of the NREGS rollout, which excludes poorer districts that were already treated. The results show that there is little evidence of a crowding out of private-sector jobs. Instead, male workers move from work for pay to family employment, which is driven by smallholder farmers.

Suggested Citation

  • Laura V. Zimmermann, 2024. "Why Guarantee Employment? Evidence from a Large Indian Public-Works Program," Economic Development and Cultural Change, University of Chicago Press, vol. 72(4), pages 2031-2067.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/726251
    DOI: 10.1086/726251
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    Cited by:

    1. Jorge Luis García, 2025. "Guaranteed Employment in Rural India: Intra-Household Labor and Resource Allocation Consequences," NBER Working Papers 33494, National Bureau of Economic Research, Inc.

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