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.

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. 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. 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. 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. 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. • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. More information about project
outputs can be found at:
http://www.igidr.ac.in/mgnrega/