Impacts of India ’ s Rural Workfare Program on Child Development

Nearly 30% of India’s rural population currently lives in poverty. In recent years, program such as the Mahatma Gandhi National Rural Guarantee Act (NREGA) have sought to improve rural livelihoods by offering pay for work. In this paper, I examine the impacts of NREGA on child development outcomes spanning health and cognitive ability. I use a differences-in-differences estimation strategy to compare outcomes in early and late phase-in districts and find that intent-to-treat program effects are largely insignificant. This suggests that household gains from NREGA may not trickle down to children through either increases in income or time availability, though these findings are subject to the limitations of the purposive sampling of the data set and rely on the fulfillment of the parallel trends assumption between districts. 1 I would like to thank Professor Mahajan for his guidance this semester and Professor Olney for her support and helpful comments. I would also like to thank Jim Church and Harrison Dekker for helping me access data throughout this semester and my four undergraduate years. Impacts of India’s Rural Workfare Program on Child Development Nearly 30% of India’s rural population currently lives in poverty. In recent years, government initiatives have sought to address poor economic conditions through loose rights-based programs that guarantee access to food, water, and sanitation, amongst others. Chief among these rights-based programs is India’s employment guarantee scheme, the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA), which offers adults from rural households one hundred days of wage labor each year to curb unemployment and boost rural incomes. Current documentation of NREGA suggests that there are positive economic and social outcomes associated with uptake, despite variable quality of administration (Klonner and Oldiges 2014). However, the majority of these studies examine effects on proximate outcomes such as labor market participation, wage levels, and poverty incidence. As administration of NREGA improves, it becomes increasingly possible and important to study the broader impacts of the employment guarantee to justify government investment and ensure program efficacy. In this paper, I examine the impacts of NREGA on child development outcomes spanning health and cognitive ability. I assess changes in outcomes using a cohort study of nearly 3000 children from six rural districts in the state of Andhra Pradesh. This analysis allows us to evaluate NREGA’s deeper impact on rural society through the focus on other household members — children — and on performance metrics rather than participation or uptake levels. I use a differences-in-differences estimation strategy to compare outcomes in early and late phase-in districts and find that intent-to-treat program effects are largely insignificant. This suggests that household gains from NREGA may not trickle down to children through either increases in income or time availability, though these findings are subject to the limitations of the purposive sampling of the data set and rely on the fulfillment of the parallel trends assumption between districts. I. The Mahatma Gandhi National Rural Employment Guarantee Act NREGA participates in a centuries-old tradition of workfare the supplying of wages and social support in return for labor. In India, this practice dates as far back as the British Poor Law of 1834. The present incarnation of the program, started in 2005, builds on Maharashtra’s state level employment guarantee program of 1972, the first to set a predefined minimum wage within the program rules, and expands it into the largest active public works program in the world. Similar social safety nets that position the government as the ‘employer-of-last-resort’ currently exist in Argentina and are being considered in France (Samson et al 2001). Familiar analogs of workfare programs from American history are the Public Works Administration and the Tennessee Valley Authority, amongst other New Deal initiatives. Unlike other limited programs, however, NREGA is designed to be universally accessible to all rural households. Adult members of a rural household may apply for a job card and, upon approval, request 100 days of manual unskilled labor assignments to be supplied within fifteen days of application. Wages must be paid at the state minimum or more and be distributed within a week of assignment completion. NREGA’s immediate goals are to lower the incidence of poverty and unemployment, but its secondary goals are to strengthen rural infrastructure, build administrative capacity, and curb rural-to-urban migration. Field reports suggest the spillover effects of construction and capacity building may take time to appear (Indian Institute of Science 2013). 2 See the Mid-day Meal Scheme, the Public Distribution System, and the Total Sanitation Campaign (leads behavioral campaigns and provides subsidies for both water and sanitation). Many state governments have also taken to distributing free consumer durables such as televisions and laptops to those without, through programs such as ELCOT in Tamil Nadu. The conditions of the program implicitly target the most marginal members of rural society — scheduled castes, tribes, and women — through program conditions and prioritized implementation. The ultra-poor are thought to be more willing to partake in the manual unskilled tasks. Women are incentivized to participate due to the guaranteed minimum wage, allowing them to somewhat overcome agricultural labor market discrimination. NREGA further ensures female participation beyond the inherent self-selection by requiring at least one third of the workforce be women and that women participate in the monitoring and management of the scheme. All worksites are intended to have childcare facilities to lessen the work burden for mothers, however field documentation notes that most projects have yet to add childcare components (Narayan 2008). As a result, fewer mothers may participate in NREGA and the intent-totreat effects of NREGA upon children may be moderated. In the Young Lives sample data used in this study, only 1 in 4 households enlisted in NREGA and surveyed in 2009 report having child care facilities at their worksites. Of the families with NREGA job cards and children younger than five, 1 in 4 report that the women do not participate in NREGA because of the lack of childcare facilities. How does NREGA work? NREGA was rolled out in three phases across rural districts (only 100% urban districts were exempt). The order of district implementation was determined by a ‘backwardness index’ previously calculated by the Indian National Planning Commission in 2003. Mani et al (2014) have found the backwardness ranking — based upon proportion of scheduled tribes and castes, agricultural wages, and output per agricultural worker (4) — to be an appropriate representation of poverty in districts. Figure 1 – NREGA Program Phases and Young Lives Sample Districts 3 From the Andhra Pradesh NREGA district website: http://nrega.nic. in/mnrega_dist. pdf Figure 2 – Timeline of NREGA phases, Young Lives surveys, and Child Ages The rollout of the program lends itself to this analysis because of the temporal and geographic variation. Though districts were not randomly chosen, differencing their outcomes over time allows us to control for time-invariant factors (used to determine program implementation order) and compare between early and late program-treated districts. Furthermore, the timing is particularly amenable to study using the Young Lives data set, as the program periods fall nicely between survey rounds and allows for clean identification of treatment. Figures 1 and 2 above show the program districts from the Young Lives sample, and the time line of NREGA implementation phases and Young Lives surveys. NREGA in Andhra Pradesh NREGA covers thirteen districts (655 blocks) in Andhra Pradesh. As of 2015, there are 76.73 lakh active workers, of whom about 20% are scheduled caste members, and 8% scheduled tribe members. Women make up 54% of the workforce (Ministry of Rural Development 2010). In comparison, the World Bank reports national proportions of 31% scheduled caste, 25% scheduled tribe, and 50% women (Satish 2013). Other reports show that female participants tend to compose a larger chunk of the work hours: in 2009/10, women made up 58% of the total work days in Andhra Pradesh, compared to 48% India-wide (Sudarshan 2011). Andhra Pradesh has been identified as one of the highest performing states since the inception of NREGA in 2006. Khera (2011) ranks Andhra Pradesh, Madhya Pradesh, Rajasthan, Tamil Nadu, and Chhattisgarh as star performers, despite lower performance levels than guaranteed by the act. Imbert and Papp’s (2012) study on the distributional labor impacts of NREGA further confirm that these states generate significantly more employment under the act relative to other states in India. Sudarshan (2011) also finds that Andhra Pradesh has the second-highest number of total workdays under NREGA. NREGA’s apparent effectiveness and high participation rate in Andhra Pradesh make it a suitable region of analysis for this study. As several papers have already found positive first-order results related to participation, wages, and consumption in Andhra Pradesh, the focus here on second order impacts, 4 This differencing strategy in accompaniment with difference-in-differences is used by researchers such as Imbert and Papp (2012) and Mani et al. (2014). 0 2 4 6 8 10 12 14 16