We examine the welfare effects of India’s workfare program NREGA using a novel, almost sharp regression discontinuity design. We find large seasonal consumption increases in states implementing the program intensely, which are a multiple of the direct income gains. We also find increases in adolescents’ school attendance. Our results imply substantial general equilibrium effects. We conclude that, when properly implemented, the public employment program holds significant potential for reducing poverty and insuring households against various adverse implications of seasonal income shortfalls.
Citation: Klonner, S. and Oldiges, C. (2019). ‘The welfare effects of India’s Rural Employment Guarantee’, OPHI Working Paper 129, University of Oxford.