Seminar by- Girish Bahal, National Council of Applied Economic Research, 13th April, 2017 (Thursday) at 3:00 PM

 Employment Guarantee Schemes and Wages in India 

by

Girish Bahal
National Council of Applied Economic Research

On

13th April, 2017 (Thursday) at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

Abstract

Using a novel data-set of district-wise program expenditure, we estimate the impact of large employment schemes on agricultural wages in India. Depending on the underlying theoretical mechanism, private wages can either respond to contemporaneous fluctuations in program expenditure or be sensitive to the stock of expenditure incurred under such programs. We first find that although program expenditure varied substantially both across and within districts, every district was covered under employment guarantee during the 2001-2010 period. Next, we empirically contrast the “spot” versus the “stock” effect of employment schemes on wages. Identification of program impact is achieved by partialling out a host of district and year specific controls. Exploiting the fund allocation process of these schemes, we further check for potentially endogenous district-year fluctuations. We find a significant positive impact on wages through the stock effect. In contrast, we do not find an immediate jump in wages suggesting weak spot effects.