Disaggregated labor supply implications of guaranteed employment in India

How do household labor supply decisions change with the entry of a massive employment guarantee program? This paper explores the household level labor allocation effects – disaggregated by gender, age group, task, and season – associated with India’s Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) as specifically implemented in the state of Andhra Pradesh. Using three rounds of panel household survey data including 3,725 households combined with project administrative records, our results suggest that participation in the MGNREGS prompted an increase in overall household labor supply by about 13 days only in the summer slack labor season, mostly attributed to adult women. This expansion, though, is not large enough to evade “crowding out” of some labor previously offered to non-MGNREGS labor tasks, particularly private casual labor opportunities, and more so in the main agricultural seasons than the summer slack season. Despite overall labor displacement, women are found to increase their time spent on farm in the rabi agricultural season while men in a small number of surveyed households spend more time on migration labor activities in all three seasons studied. Time spent on paid and unpaid activities, including household chores, do not increase for youth and children in MGNREGS-participating households, suggesting no within-household substitution of labor towards younger members.

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Conference Paper/ Presentation
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JEL Codes:
D13; E24; J22; J38; J45

 Record created 2017-04-01, last modified 2018-01-23

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