Programs that provide lower-skill employment are a popular anti-poverty strategy in developing countries, with India’s employment-guarantee program (MGNREGA) employing adults in 23% of Indian households. MGNREGA has reduced rural poverty, but some have raised concerns that guaranteeing lower-skill employment opportunities may discourage investment in human capital and long-run income growth. Using large-scale administrative data and household survey data, I estimate precise spillover impacts on education that reject substantive declines in children’s education from the government’s rollout of MGNREGA. Further, I estimate that these small negative impacts are in- expensive to counteract, particularly compared to MGNREGA expenditures on rural employment and poverty alleviation.

More on this topic

BFI Working Paper·Oct 17, 2024

Poverty, Hardship, and Government Transfers

Bruce Meyer, Jeehoon Han, and James X. Sullivan
Topics: Economic Mobility & Poverty
BFI Working Paper·Oct 10, 2024

Understanding the Heterogeneity of Intergenerational Mobility across Neighborhoods

Neil A. Cholli, Steven Durlauf, Rasmus Landersø, and Salvador Navarro
Topics: Economic Mobility & Poverty
BFI Working Paper·Oct 7, 2024

Transmission of Family Influence

Sadegh S.M. Eshaghnia, James Heckman, Rasmus Landersø, and Rafeh Qureshi
Topics: Economic Mobility & Poverty