well-implemented, the places we document improvements in groundwater levels, it was effective in providing employment for these rural workers (Imbert and Papp, 2014). This raises the concern that our results are driven not by improvements in recharge due to infrastructure improvements, our interpretation of our results, but rather because MNREGA reduced the number of individuals working in agriculture and so reduced demand for water. We have two pieces of evidence that we believe suggest this shift in labor is not driving our results.

First, the majority of individuals working in agriculture in India are wage laborers who do not own or lease their own land (Saini et al., 2020). Shifting these workers out of agriculture and into MNREGA employment does not necessarily reduce demand for water as landowners who had previously employed these workers can shift to labor saving production technologies to maintain production levels (Behrer, 2023).

Second, we show increases in both area irrigated by crop and area irrigated from wells after the implementation of MNREGA. That indicates an increase in demand for groundwater in agriculture. It is hard to square an increase in groundwater driven by reductions in demand due to agricultural exit with subsequent increases in demand for water. We also show that average soil moisture during the rabi season increased after the implementation of MNREGA. This suggests that more water is being applied to fields after the implementation of MNREGA compared to pre-MNREGA. As precipitation is essentially zero during the rabi season this increase has to come from increased irrigation and our results indicate that the increase in irrigation water comes almost exclusively from increased use of groundwater. Collectively these results suggest that it is not just some farmers (i.e. those who remain after exit) increasing water use on their plots but that aggregate water use in irrigation is higher during the rabi season after MNREGA than prior to MNREGA.

It is difficult to reconcile these results - which point directly to an increase in demand for water despite potential exits from agricultural labor - with the hypothesis that higher groundwater levels are due to decreased demand for water due to exit from agriculture. Any explanation that relies on the other effects of MNREGA (employment, general economic improvements, etc) must reconcile both of these results: groundwater levels rise in areas that see strong MNREGA implementation and water use in agriculture increases, specifically water use from wells, in those areas.<sup>21</sup> Such an explanation must also reconcile the timing of these effects. The majority of MNREGA projects occurred during the rabi season (Imbert and Papp, 2014) – after rabi groundwater measurements are taken, not the monsoon or kharif season. We observe increases in groundwater availability at the start of the rabi season. That implies that the increase in groundwater we document primarily occurs prior to any exit from agriculture due to MNREGA would occur. We document increased demand for irrigation water at precisely the time of year that MNREGA driven agricultural exit should have led to less demand, while we observe increased recharge during the season when MNREGA driven exit should have had the smallest effects.

> 21The alternative explanations can generally explain one of the effects we document - for example, increased economic activity might have led to increased demand for water - but not both. To continue the example, increased economic activity should have led to increased demand for water in all seasons, which does not explain the increased recharge that we observe.

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