Nimeh, Zina (1); Gualtieri, Alberto (2) (2017). 'A Longitudinal Analysis of the Mahatma Gandhi National Rural Employment Guarantee Act' Paper presented at the annual conference of the HDCA, Cape Town 2017.
The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in India is a universal Public Works Program (PWPs) which aims is to correct for cyclical unemployment by providing rural households with employment and income opportunities when the market fails to do so. Registered households are offered up to 100 days of work per year which should protect them from shocks and enhance their capability to smooth income and consumption when necessary. Today, the MGNREGA is one of the most important active PWPs ensuring universality and gender equality. Amartya Sen himself has praised the program as being worldwide unique in its pro-poor strategy, as no country in the world has ever given, by constitution, the right to work to such a large amount of population (Deka and Panda 2015). So far it has reportedly provided employment to 55 million households with a total amount of provided employment of over 2.04 billion person-days and over 2.5 million works taken up (Uppal 2009).
The MGNREGA has been championed as one of the most successful attempts to provide a universal employment guarantee scheme in the form of a Public Work Program. Institutionalized in 2005, it is now the largest PWP in the world, providing employment for more than 55 million rural households across the Indian state. However, despite its scale and political success, the literature has been concentrating only on specific characteristics in the program, disregarding a well-rounded, holistic analysis on poverty and deprivation.
This paper attempts to address this gap, and to examine the program’s longitudinal effects using a dual approach: the first part includes a quantitative assessment of the effect of the PWPs in our sampled population through the application of a Multidimensional Poverty Index (MPI). The methodology used to construct the index stems from Alkire-Foster’s studies but is further adapted to cater for the database used as well as for the particular regional characteristics. In the second part, we assess the ex-post effect of the PWP after the individual has completed the program, by performing a Difference-in-Difference (DiD). Here we look at a specific question: “was the participation instrumental in increasing the individual skills, knowledge or social inclusion?”
The dataset used was provided by the Young Lives Longitudinal Study which has been collecting information on child wellbeing in the area of Andhra Pradesh since 2002, following the lives of 3,000 children and young people and their families living in 20 communities in six districts and the capital Hyderabad. The entire sample is a pro-poor sample, and covers individuals from 2002 and focuses on two different cohorts of children: (a) the Older cohort and (b) the Younger cohort. These cohorts will be analyzed separately. Due to data considerations, the study specifically looks at the years from 2006 to 2014. The constructed MPI was used to assess deprivation, and was comprised of three equally weighted dimensions, namely - Education, Health and Living Standards, comprising in total of ten indicators. All the indicators have been controlled, using robustness checks, to prove their ability to correctly represent deprivation in our sampled population.
The MPI shows clearly how households participating in the program tend to have a decrease in living standard deprivation of 12.8% for the older cohort and of 8.4% for the younger cohorts. The (DiD) analysis resulted in a cumulative treatment effect of 8.7% for the Older cohort and 2.4% for the Younger cohort. Finally, some policy recommendations are given in order to better estimate the impact of PWPs on a multidimensional level in the future.
We conclude with a discussion on the importance of looking at impact of PWPs in fostering people’s capabilities, and especially children and youth. So far, the literature has been assessing the ability of PWPs in smoothing consumption when an adverse shock, such as a drought or the loss of employment, occurs as well as a way for women and other socially excluded parts of the population to actively participate in society. These assessments have been carried out only in terms of “quantifying” the impact of PWPs without focusing on the effects these programs could have had in terms of increased capabilities. Our paper aims to be an example on how to take research on the impact of PWPs a step further. And while we managed to answer our research question, we argue that we need studies that continue to monitor the participating population after they completed the program, which at the moment do not exist, or if they do, they lack the time-span necessary to conduct a meaningful assessment.