Description: Short-Term Effects of India's Employment Guarantee Program on Labor Markets and Agricultural Productivity

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Short-Term Effects of India's Employment Guarantee Program on Labor Markets and Agricultural Productivity

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...

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Main Authors:	Deininger, Klaus, Nagarajan, Hari K., Singh, Sudhir K.
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	JOBS EMPLOYMENT PRODUCTIVITY EFFECTS WAGE GAP PRODUCTION LOCAL INFRASTRUCTURE INCOME RURAL LABOR MARKETS INFORMATION LABOR FORCE LIQUIDITY ELASTICITY PUBLIC EMPLOYMENT POLITICAL ECONOMY WELFARE JOB AGE CATEGORIES EFFECTS WAGE INCREASES PRIVATE EMPLOYMENT VARIABLES RURAL LABOR INPUTS LABOR FORCE PARTICIPATION PAYMENTS PROGRAM AVAILABILITY RURAL POOR PRODUCTIVITY INCREASE AGRICULTURAL OUTPUT VALUE OF OUTPUT WAGE GROWTH RENTS TRENDS SOCIOECONOMIC IMPACTS JOB SEEKERS SMOOTHING CONSUMPTION SMALL FARMERS DEVELOPMENT LABOR MARKET RIGHT TO WORK PER CAPITA INCOME EMPLOYMENT LEVELS DEVELOPMENT ECONOMICS WORKER OUTPUTS NON-FARM EMPLOYMENT PRODUCTIVITY EXPECTED RETURN TRANSFERS MARKETS ORGANIZATIONS HOUSEHOLD SURVEYS LABOR SHORTAGES LABOR FARMERS PRIMARY SCHOOL TOTAL EMPLOYMENT LABOUR MARKETS PUBLIC WORKS PROGRAM WAGE INCREASE EFFICIENCY ECONOMIC RESEARCH WAGE LEVELS FEMALE LABOR EQUITY CONSUMPTION PRODUCTIVITY GROWTH HUMAN CAPITAL EMPLOYMENT GUARANTEE SCHEME WORKERS WAGES PRODUCTIVITY EFFECT LABOR DEMAND VALUE AVERAGE WAGE WAGE RATES CASUAL WORKERS WAGE DATA FAMILY LABOR CREDIT DEMAND OCCUPATION SAFETY NET FEMALE EMPOWERMENT AGRICULTURE PRODUCTIVE ASSETS DRY SEASON LABOR MARKET OUTCOMES HOUSEHOLD CHARACTERISTICS ASSETS PUBLIC WORKS RURAL EMPLOYMENT DIVERSIFICATION ECONOMICS PRODUCTION FUNCTION COBB-DOUGLAS PRODUCTION FUNCTION MANAGEMENT SALARIED EMPLOYMENT EQUILIBRIUM WAGES EMPLOYMENT GUARANTEE INSURANCE CONSUMPTION SMOOTHING GOODS THEORY SECURITY GROWTH RATE INVESTMENT IRRIGATION RISK PROGRAM COST POVERTY FEMALE LABOR FORCE POOR FARMERS CRISES SUPPLY LABOR SUPPLY WAGE EFFECTS PROFIT AGRICULTURAL PRODUCTIVITY CHILD LABOR UNSKILLED WORKERS TOTAL OUTPUT LABOUR LABOR MARKETS OUTCOMES SAFETY RURAL DEVELOPMENT UNSKILLED LABOR SELF-EMPLOYMENT AGRICULTURAL SELF-EMPLOYMENT PRICES NON-FARM SECTOR DEVELOPMENT POLICY FUTURE RESEARCH
Online Access:	http://documents.worldbank.org/curated/en/2016/05/26360847/short-term-effects-indias-employment-guarantee-program-labor-markets-agricultural-productivity http://hdl.handle.net/10986/24502

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Summary:	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.