Regressions for labor market participation in table 5 allow us to explore the extent to which wage changes affected labor supply and demand. In the aggregate, we find insignificant impacts on the incidence of agricultural wage work but a significant increase (by 3.4 points) in non-farm casual work including NREGS jobs. There is evidence of a program-induced 5 point increase in on-farm self-employment, either to substitute for lower availability of wage labor or as a result of intensification that may partly be attributed to a greater ability to bear risk by households who, in program areas, can rely on the implicit safety net provided by the program. Allowing heterogeneity of effects by gender (panel B) points towards an increase of labor supply to the agricultural sector by males but a shift away from farm to non-farm employment and to some extent even the salaried sector, by females. Allowing for heterogeneity of program impacts by size of households’ land endowment (panel C) suggests that increases in labor supply to the non-farm sector are concentrated among the landless and small or medium sized farmers who are the MNREGS’ main target group. While the landless increase supply of labor to the farm as well as the non-farm sector, significant increases in labor supply to agricultural self-employment emerge only for small and to some degree medium farmers, possibly because some MNREGS-investment can be performed on farm. We also find evidence of a reduction of non-farm self-employment and an increase in salaried work by the largest land owners.

To appreciate MNREGS’ effects on agricultural labor markets and to assess particularly if concerns about program-induced wage increases having caused labor shortages and prompted premature mechanization are supported by the evidence, we explore data on labor demand and supply. Estimates of program impacts on the number of hired (panel A) and family worker days (panel B) used in agricultural production by the about 3,200 farmers in the sample in table 6 lead to a number of conclusions. First, the program is estimated to have prompted a significant reduction of hired labor use which is estimated to have dropped by 8.4 days (col. 1), mainly due to reduced use of pre-harvest compared to harvest labor (-5 _vs_ . -3 days). This reduction is driven by a shift from the farm- to the non-farm sector by females. Absence of significant differences by farm size class (panel A1) suggests it affected farms of different sizes equally. Panel B illustrates that lower hired labor demand was more than compensated for by more intensive use of family labor -with point estimates of 18, 11, and 6 for total, male, and female days. Disaggregating by stage in the production cycle suggests that the program did not affect pre-harvest labor demand but led to a significant increase in labor days used for harvesting, with estimates of 12, 7, and 4 for total, males, and females, respectively. While MNREGS led to reduced use of hired labor, this was more than compensated for by higher intensity of family labor, indicating a positive program effect on agricultural labor use overall.

# **4.2 Impacts on agricultural input use and crop or technology choice**

To assess potential impacts on productivity and diversification, evidence of MNREGS effects on total output value and use of fertilizer and machinery as well as crop composition and the share of irrigated area 12