IDEAS home Printed from https://ideas.repec.org/p/cde/cdewps/277.html
   My bibliography  Save this paper

The Impact of MGNREGA on Agricultural Outcomes and the Rural Labour Market- A Matched DID Approach

Author

Listed:
  • Deepak Varshney, Deepti Goel and J.V. Meenakshi

    (Department of Economics, Delhi School of Economics, University of Delhi)

Abstract

This paper attempts to address the impact of the MGNREGA on the rural agricultural sector, focusing on cropping patterns, irrigated area, crop yields, wages and rural employment. The analysis is based on two data sources- the first is a unique district-season level panel dataset that we construct using multiple sources- and the second is unit-record data from the NSS Employment Unemployment Surveys. To identify causal effects, we employ a difference-indifference matching (DIDM) procedure, where districts are matched based on propensity scores- the use of propensity scores represents a novel aspect of this paper. We also examine pre-programme trends for each outcome variable to provide a check on the validity of our estimates. Our results indicate modest changes in cropping patterns that are state- and period-specific- however they do not indicate any improvements in crop yields that were expected given the MGNREGA’s focus on investments in irrigation, although there is some evidence that irrigated area may have expanded after a lag. We also find that there is no systematic evidence of impact on wages, and therefore no evidence that public works employment in MGNREGA crowded out casual labour in agriculture.

Suggested Citation

  • Deepak Varshney, Deepti Goel and J.V. Meenakshi, 2017. "The Impact of MGNREGA on Agricultural Outcomes and the Rural Labour Market- A Matched DID Approach," Working papers 277, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:277
    as

    Download full text from publisher

    File URL: http://www.cdedse.org/pdf/work277.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Esther Gehrke, 2019. "An Employment Guarantee as Risk Insurance? Assessing the Effects of the NREGS on Agricultural Production Decisions," The World Bank Economic Review, World Bank, vol. 33(2), pages 413-435.
    2. Songqing Jin & Yanyan Liu, 2013. "Welfare and Poverty Impacts of India’s National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh," Working Papers id:5530, eSocialSciences.
    3. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    4. Bhargava, Anil K., 2013. "The Impact of India’s Rural Employment Guarantee on Demand for Agricultural Technology," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150163, Agricultural and Applied Economics Association.
    5. Rosenzweig, Mark R, 1978. "Rural Wages, Labor Supply, and Land Reform: A Theoretical and Empirical Analysis," American Economic Review, American Economic Association, vol. 68(5), pages 847-861, December.
    6. Kanika Mahajan, 2015. "Farm wages and public works," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 8(1), pages 19-72, April.
    7. Deininger, Klaus & Liu, Yanyan, 2013. "Welfare and poverty impacts of India's national rural employment guarantee scheme : evidence from Andhra Pradesh," Policy Research Working Paper Series 6543, The World Bank.
    8. Clément Imbert & John Papp, 2015. "Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 233-263, April.
    9. Nagaraj, N. & Bantilan, Cynthia & Pandey, Lalmani & Roy, Namrata Singha, 2016. "Impact of MGNREGA on Rural Agricultural Wages, Farm Productivity and Net Returns: An Economic Analysis Across SAT Villages," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 71(2), June.
    10. Farzana Afridi & Abhiroop Mukhopadhyay & Soham Sahoo, 2016. "Female labor force participation and child education in India: evidence from the National Rural Employment Guarantee Scheme," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-27, December.
    11. Ravi, Shamika & Engler, Monika, 2015. "Workfare as an Effective Way to Fight Poverty: The Case of India’s NREGS," World Development, Elsevier, vol. 67(C), pages 57-71.
    12. Berg, Erlend & Bhattacharyya, Sambit & Rajasekhar, D. & Manjula, R., 2018. "Can public works increase equilibrium wages? Evidence from India’s National Rural Employment Guarantee," World Development, Elsevier, vol. 103(C), pages 239-254.
    13. Azam, Mehtabul, 2012. "The Impact of Indian Job Guarantee Scheme on Labor Market Outcomes: Evidence from a Natural Experiment," IZA Discussion Papers 6548, Institute of Labor Economics (IZA).
    14. Dutta, Puja & Murgai, Rinku & Ravallion., Martin & van de Walle, Dominique, 2012. "Does India's employment guarantee scheme guarantee employment ?," Policy Research Working Paper Series 6003, The World Bank.
    15. Kareemulla, Kalakada & Reddy, K. Srinivas & Rao, C.A. Rama & Kumar, Shalander & Venkateswarlu, B., 2009. "Soil and Water Conservation Works through National Rural Employment Guarantee Scheme (NREGS) in Andhra Pradesh — An Analysis of Livelihood Impact," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 22(Conferenc).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Varun Kumar Das & A. Ganesh Kumar, 2017. "Drivers of Farmers' Income: The Role of Farm Size and Diversification," Working Papers id:12104, eSocialSciences.
    2. Sheahan, Megan & Liu, Yanyan & Narayanan, Sudha & Barrett, Christopher B., 2015. "Disaggregated labor supply implications of guaranteed employment in India," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 237345, Agricultural and Applied Economics Association.
    3. Varun Kumar Das & A. Ganesh-Kumar, 2018. "Farm size, livelihood diversification and farmer’s income in India," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(2), pages 185-201, June.
    4. Taraz, Vis, 2023. "Public works programmes and agricultural risk: Evidence from India," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(02), January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deininger, Klaus & Liu, Yanyan, 2019. "Heterogeneous welfare impacts of National Rural Employment Guarantee Scheme: Evidence from Andhra Pradesh, India," World Development, Elsevier, vol. 117(C), pages 98-111.
    2. Misra, Kartik, 2019. "Does historical land inequality attenuate the positive impact of India’s employment guarantee program?," World Development, Elsevier, vol. 124(C), pages 1-1.
    3. Sheahan, Megan & Liu, Yanyan & Narayanan, Sudha & Barrett, Christopher B., 2015. "Disaggregated labor supply implications of guaranteed employment in India," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 237345, Agricultural and Applied Economics Association.
    4. Deininger, Klaus & Nagarajan, Hari K & Singh, Sudhir K, 2020. "Women's political leadership and economic empowerment: Evidence from public works in India," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 277-291.
    5. Parmar, Divya & Banerjee, Aneesh, 2019. "Impact of an employment guarantee scheme on utilisation of maternal healthcare services: Results from a natural experiment in India," Social Science & Medicine, Elsevier, vol. 222(C), pages 285-293.
    6. Bose, Nayana, 2017. "Raising Consumption Through India’s National Rural Employment Guarantee Scheme," World Development, Elsevier, vol. 96(C), pages 245-263.
    7. C. Justin Cook & Manisha Shah, 2022. "Aggregate Effects from Public Works: Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 797-806, October.
    8. Taraz, Vis, 2023. "Public works programmes and agricultural risk: Evidence from India," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(02), January.
    9. Bhargava, Anil K., 2015. "NREGA's Impact on Agricultural Production, Labor, and Technology Adoption: New Evidence from a Detailed Indian Household-Plot Panel," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205695, Agricultural and Applied Economics Association.
    10. Drèze, Jean & Khera, Reetika, 2017. "Recent Social Security Initiatives in India," World Development, Elsevier, vol. 98(C), pages 555-572.
    11. Mihir Shah, 2016. "Should India do away with the MGNREGA?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(1), pages 125-153, March.
    12. Klonner, Stefan & Oldiges, Christian, 2022. "The welfare effects of India’s rural employment guarantee," Journal of Development Economics, Elsevier, vol. 157(C).
    13. Deininger,Klaus W. & Jin,Songqing & Nagarajan,Hari Krishnan & Singh,Sudhir K., 2020. "Political Reservation and Female Labor Force Participation in Rural India," Policy Research Working Paper Series 9350, The World Bank.
    14. World Bank Group, 2015. "India Development Update, April 2015," World Bank Publications - Reports 21872, The World Bank Group.
    15. Sarma, Nayantara, 2022. "Domestic violence and workfare: An evaluation of India’s MGNREGS," World Development, Elsevier, vol. 149(C).
    16. Deininger,Klaus W. & Nagarajan,Hari Krishnan & Singh,Sudhir K. & Deininger,Klaus W. & Nagarajan,Hari Krishnan & Singh,Sudhir K., 2016. "Short-term effects of India's employment guarantee program on labor markets and agricultural productivity," Policy Research Working Paper Series 7665, The World Bank.
    17. Alik-Lagrange, Arthur & Buehren, Niklas & Goldstein, Markus & Hoogeveen, Johannes, 2023. "Welfare impacts of public works in fragile and conflict affected economies: The Londö public works in the Central African Republic," Labour Economics, Elsevier, vol. 81(C).
    18. Jules Gazeaud & Victor Stephane, 2023. "Productive Workfare? Evidence from Ethiopia's Productive Safety Net Program," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 265-290, January.
    19. Merfeld, Joshua D., 2019. "Spatially heterogeneous effects of a public works program," Journal of Development Economics, Elsevier, vol. 136(C), pages 151-167.
    20. Surya Bhushan, 2021. "Labour Productivity Dynamics in Indian Agriculture: 2000–2016," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(2), pages 371-388, June.

    More about this item

    Keywords

    MGNREGA; Public Works; Agriculture;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cde:cdewps:277. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sanjeev Sharma (email available below). General contact details of provider: https://edirc.repec.org/data/cdudein.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.