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

Arbeitspapier

Most countries around the world implement some form of a safety net program for poor households. A widespread concern is that such programs crowd out private-sector jobs. But they could also improve workers' welfare by allowing them to take on more risk, for example through self-employment. This paper analyzes the employment impacts of the world's largest public-works program using a novel regression-discontinuity design. The analysis exploits detailed institutional information to describe the allocation formula of the program and to construct a benefit calculator that predicts early and late treatment of districts. The results show that there is little evidence of a crowding out of private-sector jobs. Instead, the scheme functions as a safety net after a bad rainfall shock. Male workers also take on more risk by moving into family employment. This self-revealed preference for a different type of job suggests other potential benefits of safety net programs which so far have received little attention in the literature.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: GLO Discussion Paper ; No. 504

Classification and Topics

• Classification: Wirtschaft ; National Government Expenditures and Welfare Programs ; State and Local Government: Health; Education; Welfare; Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Time Allocation and Labor Supply ; Wages, Compensation, and Labor Costs: Public Policy
• Subject: public-works program ; anti-poverty program ; National Rural Employment Guarantee Scheme ; NREGA ; NREGS ; India ; regression discontinuity design ; safety net ; crowding out ; risk coping ; risk mitigation ; insurance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Zimmermann, Laura
• Event: Veröffentlichung
• (who): Global Labor Organization (GLO)
• (where): Essen
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/215480
• Last update: 10.03.2025, 11:44 AM CET