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Theme 4:
Welfare effects
Implementation of MGNREGA in India:
A Review of Impacts for Future Learning
Featuring work comple...
Introduction
• One of the goals of MGNREGA is to improve well-being in rural areas
• Like labor market outcomes, effects a...
Review of literature
• Impacts on beneficiary households
• Johnson (2009)
• Ravi and Engler (2012)
• Dutta et al. (2014)
•...
Review of literature
• Other impacts
• Credit access and worthiness (Dey, 2014)
• MGNREGA as stepping stone, non farm ente...
Review of literature: impact on beneficiaries
• Impacts at the household level
• Most studies have used samples of househo...
• Impact on consumption and nutrient intake
• Kumar and Joshi (2013) compare NREGA beneficiary households with
households ...
Review of literature: impact on beneficiaries
• Impacts on children within beneficiary households (1)
• Consumption
• Whil...
Review of literature: impact on beneficiaries
• Impacts on children within beneficiary households (2)
• Child labor and ed...
Review of literature: women’s empowerment
• Holmes, et al. (2011)
• Source of earnings, greater decisions over food purcha...
Deininger and Liu (2013)
• Research question: How does MGNREGA affect welfare
of its participants in Andhra Pradesh after ...
Deininger and Liu (2013)
• Results: phase 1 districts
• Between 43-50 percent of households had a job card in the 2006
and...
Deininger and Liu (2013)
• Results: phase 2 and 3 districts
• In phase 2 district, 33-35 percent of households had a job c...
Deininger and Liu (2013)
• Results
• Sub-populations within participants
• In the short term, higher levels of growth in c...
Review of literature: impact on non-beneficiaries
• Country-wide:
• Using district-level panel data from NSSO between 2005...
Liu, Sheahan, Deininger (in progress)
• Research questions
1. What are the welfare gains from MGNREGA on the entire
popula...
Liu, Sheahan, Deininger (in progress)
• Preview of results still in progress:
• Largest and most significant positive effe...
Liu, Sheahan, Deininger (in progress)
• Implications of results so far:
• The welfare impacts that others have calculated ...
More information about project
outputs can be found at:
http://www.igidr.ac.in/mgnrega/
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IFPRI-IGIDR Workshop on Implementation of MGNREGA in India A Review of Impacts for Future Learning - Welfare - Megan Sheahan, Sudha Narayanan

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Presented at a one day workshop jointly organized by Indira Gandhi Institute of Development Research (IGIDR), International Food Policy Research Institute (IFPRI), Cornell University, with funding from International Initiative for Impact Evaluation (3ie) titled 'Implementation of MGNREGA in India: A Review of Impacts for Future Learning'.

The main objective of the workshop was take stock of the current scenario of MGNREGA, assess the impacts it has made over the past decade and emerge with knowledge as to the areas under MGNREGA that still need to be studied and can be opened up with more research.

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IFPRI-IGIDR Workshop on Implementation of MGNREGA in India A Review of Impacts for Future Learning - Welfare - Megan Sheahan, Sudha Narayanan

  1. 1. Theme 4: Welfare effects Implementation of MGNREGA in India: A Review of Impacts for Future Learning Featuring work completed by IFPRI, Cornell University, and IGIDR with funding from 3ie
  2. 2. Introduction • One of the goals of MGNREGA is to improve well-being in rural areas • Like labor market outcomes, effects and impacts of the program on various welfare measures can be studied at different levels: • Effects on participants • Via increased income through work opportunities and wages • Via investments in productivity-enhancing land or other forms of capital • Via compounding effects of increased savings and capital accumulation • Effects on everyone, including non-participants • Via spill over effects on wages and prices • Well-being measures of interest generally include: • Income • Expenditures • Food consumption and nutrition • Asset accumulation • In this context, women’s empowerment is also an important topic and measure to consider
  3. 3. Review of literature • Impacts on beneficiary households • Johnson (2009) • Ravi and Engler (2012) • Dutta et al. (2014) • Deininger and Liu (2013) • Impacts on children in beneficiary households • Dasgupta (2013) • Dev (2011) • Islam and Sivasankaran (2014) • Afridi, Mukhopadhyay, Sahoo (2012) • Impacts on full population (including non-beneficiaries) • Imbert and Papp (2015) • Klonner and Oldiges (2012) • Liu, Sheahan, Deininger (in progress)
  4. 4. Review of literature • Other impacts • Credit access and worthiness (Dey, 2014) • MGNREGA as stepping stone, non farm enterprises • Food and Nutritional intake and Status • Kumar and Joshi (2013) • Jha, Bhattacharya and Gaiha (2010) • Uppal (2009) • Dasgupta (2013) • Nair et. al (2013) • Women’s empowerment • Holmes, et al. (2011) • Khera and Nayak (2009) • Sudarshan (2011), Sudarshan (2006) • Pankaj and Tankha (2009) • Carswell and de Neve (2010) • Amaral et al. (2015)
  5. 5. Review of literature: impact on beneficiaries • Impacts at the household level • Most studies have used samples of households in one state (still no study, to our knowledge, that looks at country-wide welfare impacts on program beneficiaries) • In Andhra Pradesh, MGNREGA provides money when they most need it most, during rainfall shocks (Johnson 2009) • Also in Andhra Pradesh, participating households had higher consumption (total and per capita) than households denied access to the program (Ravi and Engler 2012) • Total expenditures up 9.6 percent, food expenditures up 23 percent, and nonfood expenditures up 17 percent • Participants were 21 percent more likely to have a savings account • In Bihar, extra earnings from the scheme reduced poverty among participants by 5.4 percentage points in their sampled area (Dutta et al. 2014) • Dev (2011) looks at studies across numerous states and finds that low number of work days available to workers in most states means little added income. Higher performing states, like AP in the studies above, where days worked by participants are greater mean more opportunity to positively influence welfare.
  6. 6. • Impact on consumption and nutrient intake • Kumar and Joshi (2013) compare NREGA beneficiary households with households that desired to work but could not get the same (non- beneficiary households) using 66th round NSS data and find that non- beneficiary household had a lower calorie and protein intakes compared to beneficiary households • Jha, Bhattacharyya and Gaiha (2010) estimate the impact of NREGA wages on intake of nutrients in Andhra Pradesh, Rajasthan, and Maharashtra and find positive and significant impacts on the intake of certain nutrients(proteins, minerals, carbs, calories, phosphorous, iron, thiamine, niacin) in all three states and some (fiber, calcium, carotene, riboflavin, vitamin c) in two or less. Review of literature: impact on beneficiaries
  7. 7. Review of literature: impact on beneficiaries • Impacts on children within beneficiary households (1) • Consumption • While MGNREGA participation in Andhra Pradesh does not correct for long term past health deficiencies, it is useful in buffering nutritional intake during drought shocks (Dasgupta 2013) • Child Nutrition • Young Lives dataset for Andhra Pradesh, 3000 children. Uppal (2009) finds that take up of NREGA work increases the height-for-age z score standard deviations • Using the same dataset for children who were 6 to 18 months old in 2002, Dasgupta (2012) that while access to NREGA coverage helps cope with recent drought shocks, it cannot correct long- term past deficiencies. • In a mixed- methods study of 528 households in Rajasthan, Nair et al (2013) report that households participating in NREGA were less likely to have wasted infants and underweight infants than non- participating households.
  8. 8. Review of literature: impact on beneficiaries • Impacts on children within beneficiary households (2) • Child labor and education • Country-wide: Younger children spend more time in school while older children spend more time working outside of the household when a parent participates in MGNREGS (Islam and Sivasankaran 2014) • Andhra Pradesh: Using panel survey data of individual children, show that female MGNREGS participation is associated with better educational outcomes of their children while male participation has an opposite and negative effect on their children’s schooling (Afridi, Mukhopadhyay, Sahoo 2012) • Andhra Pradesh: Using same panel data above, parental registration with MGNREGS reduces the probability of male child labor by 13.4 percent and female child labor by 8.2 percent (Uppal 2009) • Child supervision • Lack of child care facilities on worksites is widespread, so many children remain unsupervised (various studies as reviewed in Dev 2011, Narayanan, 2008)
  9. 9. Review of literature: women’s empowerment • Holmes, et al. (2011) • Source of earnings, greater decisions over food purchase, but conflicts too • Social mobilization and capital, but lot of constraints (single women, childcare) • Khera and Nayak (2009) • Sudarshan 2011, Sudarshan, 2006 • Kerala, HP and Rajasthan • Pankaj and Tankha, 2009; • Lifeline for women, but problems with childcare (Narayanan, 2008;Bhatty 2006) • Increased female labor participation increased total gender-based violence (Amaral et al. 2015) • Decreases in dowry deaths • Increases in kidnappings, sexual harassment and domestic violence
  10. 10. Deininger and Liu (2013) • Research question: How does MGNREGA affect welfare of its participants in Andhra Pradesh after 2 years of implementation? • Data: Household survey data from around 4,000 households from three years (2004, 2006, 2008) • Method: Compare households across the three phases and look at changes in welfare outcomes over time • Study a large set of welfare indicators to look for a range of potential effects • Main result: the program was reasonably well targeted and had significant impacts, the magnitude of which exceeded the value of direct transfers. Project paper
  11. 11. Deininger and Liu (2013) • Results: phase 1 districts • Between 43-50 percent of households had a job card in the 2006 and 2008 survey years, but 5, 33, 41 percent actually worked on the project in fiscal years 2006, 2007, and 2008 respectively • For participating households, an annual increase of 7 percent in per capita consumption expenditure in short and medium term • These estimated gains exceed the magnitude of MGNREGA- related cash transfers to participants. • Significant increase in nonfinancial asset accumulation in the medium term Project paper
  12. 12. Deininger and Liu (2013) • Results: phase 2 and 3 districts • In phase 2 district, 33-35 percent of households had a job card in 2007 and 2008, but only 4 percent participated in 2007 and 30 percent participated in 2008 • In phase 3 district, 43 percent of households had a job card in 2008 but only 19 percent participated • Significant impacts on nutritional outcomes (total calories consumed and protein intake) in the short term • No effect on asset accumulation, possibly because this isn’t expected to be a short term effect (based on phase 1 results) Project paper
  13. 13. Deininger and Liu (2013) • Results • Sub-populations within participants • In the short term, higher levels of growth in consumption, energy, and protein intake due to MGNREGS benefits that are exclusively concentrated among SC/ST households • Impact pathways • Through labor markets • Program benefits translate into additional income and labor (not crowding out) • Additional casual labor income from MGNREGS participation: Rs. 3,304 (total), 1,797 (female), and 1,522 (male) • Through land investment • Levels of investment in farmland were uniformly higher in program period • However, this change is not specific to participants • Non-participants were also investing in land at the same time, which may be related to other MGNREGA effects Project paper
  14. 14. Review of literature: impact on non-beneficiaries • Country-wide: • Using district-level panel data from NSSO between 2005-2008, find a reduction in poverty gap by one-fifth, focusing on most extreme poverty (Klonner and Oldiges 2012) • However, no effect on individual consumption and no effect on overall poverty headcount • Most poverty alleviation seen in phase 2 districts (not phase 1) • Following on their labor market results, welfare gains to the poor from the increase in private sector wages are large, also large relative to the gains received solely by program participants (Imbert and Papp 2015) • Households in bottom three consumption quintiles have welfare gains from those increases in rural wages that represent 31 percent of total welfare gain from MGNREGA • Richer households are actually made worse off since they pay wages • In rural Bihar: • It is estimated that that the scheme reduced the poverty rate by 1.4 percent in phase 1 and 0.5 percent in phase 2 (Dutta et al. 2014)
  15. 15. Liu, Sheahan, Deininger (in progress) • Research questions 1. What are the welfare gains from MGNREGA on the entire population in sampled areas of Andhra Pradesh then non- participants specifically? 2. If welfare gains can be identified, what is their pathway? • Extending analysis and data set constructed by Deininger and Liu (2013): 4,000 households from 5 districts in AP in 2004, 2006, and 2008 • Study the same set of welfare outcomes Project paper
  16. 16. Liu, Sheahan, Deininger (in progress) • Preview of results still in progress: • Largest and most significant positive effects found in total food expenditures • True for both full population and non-beneficiaries exclusively • This suggest large “spill over” effects from MGNREGA • However, no increase in total calorie consumption and protein intake • This suggests that most of the food expenditure gains observed are actually from rising prices on account of MGNREGA, not actual changes in consumption Project paper
  17. 17. Liu, Sheahan, Deininger (in progress) • Implications of results so far: • The welfare impacts that others have calculated that rely exclusively on expenditures or income gains do not account for the change in prices observed at the same time • These aforementioned results, therefore, may overstate expected benefits from the program • Rising food prices on account of “food price crisis” that also occurred during initial years of program implementation (Jacoby 2013) • We know that some of those increases in food prices may have been on account of MGNREGA, so careful analysis needed to understand true net-effect of changes in wages and food prices Project paper
  18. 18. More information about project outputs can be found at: http://www.igidr.ac.in/mgnrega/

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