Labor Market Impacts of a Large-Scale Public Works Program: Evidence from the Indian Employment Guarantee Scheme

Laura Zimmermann, University of Michigan

Recent years have seen an increasing interest in using public-works programs as anti-poverty measures in developing countries. This paper analyzes the rural labor market impacts of the Indian National Rural Employment Guarantee Scheme (NREGS), one of the most ambitious programs of its kind, by using a regression discontinuity design. NREGS provides a legal guarantee of up to a 100 days of public-sector employment per year to rural households at the minimum wage. The findings suggest that the program has had limited impacts on rural labor markets overall, but that it may nevertheless be an important scheme for some particularly vulnerable subgroups.