Aggregate Effects from Public Works: Evidence from India

This paper explores the aggregate economic effects from India's National Rural Employment Guarantee Scheme (NREGS), which provides up to 100 days of labor to rural laborers at the mandated minimum wage. We examine the within-district change to night-time lights and banking deposits using the st...

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Bibliographic Details
Published inNBER Working Paper Series
Main Authors Cook, C Justin, Shah, Manisha
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.06.2020
Subjects
Economic theory
India
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Summary:This paper explores the aggregate economic effects from India's National Rural Employment Guarantee Scheme (NREGS), which provides up to 100 days of labor to rural laborers at the mandated minimum wage. We examine the within-district change to night-time lights and banking deposits using the staggered program rollout for identification. We find consistent and robust evidence that NREGS increased aggregate economic output by 1-2% per capita measured by night-time lights. This effect, however, is not equal across districts. We observe no positive effect of the program in poorer districts, illuminating an important source of heterogeneity.
ISSN:0898-2937
DOI:10.3386/w27395