Tuesday, August 24, 2010

What determines employment in NREGS?

India's Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is one of the largest and probably successful rural employment generation program in the world. Any adult from a household  who is willing to do manual labor at a given minimum wage rate is guaranteed a maximum of 100 days of employment. For more on introductory stuff about this program see this and this.At a cost of around 0.6 percent of GDP, this program provided employment to over 45 million households last year.

An interesting question is: what determines employment in NREGS? Jha, Gaiha and Pandey, in a recent ASARC Working Paper 2010/17, argue that the ratio of NREGS wage to agriculture wage, marital status, age, gender, and education determines employment in the rural employment guarantee program. Their conclusion is based on household level survey data from three states: Rajasthan, Andhra Pradesh, and Maharashtra.

While it is broadly true that the selection of workers for NREGS favours illiterate workers and those from deprived backgrounds, female workers appear to have a lower chance of being selected. In two of the three states, the ratio of NREGS wage to agricultural wage has significant effects. Marital status and age also affect the chances of getting employment in NREGS. Within each state, workers in some districts have higher chances of being employed in NREGS. 
Once employed in NREGS, the duration of such employment is affected by social background or educational status. Factors relevant for selection for NREGS are not necessarily so for the duration of employment.

1 comment:

  1. Updated link to the paper: http://www.crawford.anu.edu.au/acde/asarc/pdf/papers/2010/WP2010_17.pdf

    Determinants of Employment in India’s National Rural Employment Guarantee Scheme.
    Jha, Raghbendra; Gaiha, Raghav; Pandey, Manoj K
    ASARC Working Paper 2010/17