Our results are consistent with MNREGA projects improving recharge rates by improving water conservation and/or irrigation infrastructure. Because much of this infrastructure is constructed with unlined bottoms which therefore allows water to percolate from the surface into the groundwater it leads to recharge and raises groundwater levels. It also appears, given the decline in water levels from the beginning of the rabi season to the pre-monsoon measurements, that some of this is drawn down by farmers and used for irrigation.

We therefore turn now to the impacts on farmers’ irrigation choices and direct measurements of soil moisture pre- and post-MNREGA implementation.

# **5.2 Impacts on irrigation**

To test whether farmers take advantage of the increased water stored in aquifers implementation of MNREGA, we examine whether soil moisture increases after implementation of MNREGA, whether farmers increase the area of crops that are irrigated, and what sources are used for irrigation preand post-MNREGA. If the projects that were constructed due to MNREGA raised groundwater levels the reliability of access to groundwater should have been increased. To the extent that the cost of irrigation depends on the height the water needs to be raised, the cost of accessing that water would also have declined. A possible consequence of the increase in reliability and decrease in access costs is a transition in what farmers plant. In particular, access to more reliable and lower cost sources of groundwater typically lead farmers to adopt higher value and more water intensive crops (Hornbeck and Keskin, 2014, 2015).

Starting with soil moisture and using our satellite based measures, we show that soil moisture (measured as the quantity of water in a cubic meter of soil) increases after the implementation of MNREGA. The event studies (Figure 3) for both annual soil moisture and soil moisture during the rabi season show substantial increases in soil moisture after the implementation of MNREGA compared to flat pre-trends in rabi soil moisture. Results in Table 2 indicate that the annual average level of soil moisture increases by 2% after implementation of MNREGA. But the effect in the rabi season, when irrigation is most important, is substantially larger, with soil moisture over the course of the rabi season increasing by an average of 6% after MNREGA implementation.

The increase in soil moisture we document is consistent with the results in Table 3 and Figure 4 showing an increase in the area irrigated across a range of crops after the implementation of MNREGA. For each of rice, wheat, and cotton, farmers increase the share of crop area irrigated by approximately 15% after the implementation of MNREGA. Farmers increase the area irrigated in fruits and vegetables by an even larger 34%. The event studies for each crop show generally flat pre-trends leading up to MNREGA implementation. These irrigation results suggest that MNREGA eased access to reliable groundwater and farmers, who were previously constrained by access to groundwater, responded by irrigating more of their cropped area. It also offers a potential explanation for previous evidence that farmers planted riskier but higher value crops after the implementation of MNREGA (Hari and Raghunathan, 2017).<sup>19</sup>

> 19Increased access to reliable groundwater is certainly not the only reason farmers would shift crops after MN-

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