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.
Links:
[1] http://admin.indiaenvironmentportal.org.in/reports-documents/short-term-effects-indias-employment-guarantee-program-labor-markets-and
[2] http://admin.indiaenvironmentportal.org.in/category/author/klaus-deininger
[3] http://admin.indiaenvironmentportal.org.in/category/author/hari-k-nagarajan
[4] http://admin.indiaenvironmentportal.org.in/category/author/sudhir-k-singh
[5] http://admin.indiaenvironmentportal.org.in/category/publisher/world-bank
[6] http://admin.indiaenvironmentportal.org.in/category/thesaurus/national-rural-employment-guarantee-scheme-nregs
[7] http://admin.indiaenvironmentportal.org.in/category/thesaurus/india
[8] http://admin.indiaenvironmentportal.org.in/category/thesaurus/agricultural-labourers
[9] http://admin.indiaenvironmentportal.org.in/category/thesaurus/agriculture
[10] http://admin.indiaenvironmentportal.org.in/category/thesaurus/rural-development