NREGA increased daily private earnings in the lean or “dry” agricultural season by approximately 4.9% in the districts that received NREGA early during 2006 and 2007. I find no significant increase in daily private earnings in the peak or “rainy” agricultural season. These baseline results are very similar to the results reported by Imbert and Papp (2015). Keeping the exact baseline specifications, I then control for per-capita expenditure under SGRY during 2004, 2005, and 2007. Comparing the results with and without SGRY, I find that not controlling for SGRY underestimates NREGA’s impact on daily casual earnings by approximately 34 – 40%.

Third, I study the general equilibrium effect of NREGA on casual employment in the public and private labor market. Consistent with the results reported in the literature, I find NREGA to significantly increase (decrease) casual work in the public (private) labor market during the dry season when agricultural work in the private sector is scarce. Not controlling for SGRY, I find NREGA to have increased work in public employment by approximately 1 percentage point and decreased private sector work by 1.8 percentage points in the dry season. Not controlling for expenditure under SGRY underestimates the impact on public and private employment by approximately 25% and 34%, respectively. The same pattern emerges when I estimate employment outcomes for men and women separately.

Finally, I study NREGA’s impact on human capital outcomes. Recent studies like Islam and Sivasankaran 2015; Li and Sekhri 2020 and Shah and Steinberg 2021 conclude that school enrollment numbers declined while child labor increased due to the spillover effects of the public workfare. Adukia (2020) also finds small negative effects of NREGA on educational outcomes. However, Adukia (2020) notes that the declines in education are not substantial, especially when the cost of every one-child decline in school enrollment is compared to the benefit of the number of households employed through NREGA.<sup>5</sup> Using data and replication codes from Shah and Steinberg (2021), I reassess the effect of NREGA on school enrollment and child labor after controlling for SGRY. While the change in coefficients is not nearly as significant as the change in labor market outcomes for adults reported above, the results are more pronounced with SGRY. Controlling for SGRY, NREGA’s impact on school enrollment and child labor is more negative and positive, respectively. The marginal change in children’s outcomes is expected if, consistent with Adukia (2020), NREGA has a much more pronounced effect on adult outcomes relative to outcomes for children.

Overall, this article’s findings are consistent with the existing literature and reaffirm the significant general equilibrium effects of large public workfares. The key contribution of this study is to underscore the relevance of controlling for an older program while conducting an impact evaluation of a new policy intervention. In the absence of random treatment-control designs, ignoring relevant previous policies can substantially underestimate a new policy’s impact. Using different outcome variables and data, I show how ignoring the older program may considerably underestimate the workfare’s effect on the variable of interest.

The rest of the article is structured as follows. Section 2 discusses SGRY and NREGA in detail. Section 3 discusses the data, and section 4 presents the empirical model and results. Section 5 concludes.

# **2. NREGA and its predecessor**

Pan-India public workfare programs did not start from SGRY and date back to the Food for Work program in 1977. We restrict our analysis to these two programs due to two key reasons. First, both SGRY and NREGA were “integrated workfare programs” with employment generation and rural infrastructure creation as their dual objectives. Before 2001, these two objectives were addressed by multiple, smaller programs. Hence, no program before 2001 was structurally similar to SGRY and NREGA. See Bahal (2020) for a detailed discussion on India’s major rural welfare programs since 1980. Second, district-level expenditure information is not available for any program before SGRY. District-level program expenditure data is publicly available only for NREGA. The expenditure data for SGRY used in this paper was specially sourced from the Ministry of Rural Development, Government of India. The sub-sections below discuss and compare SGRY and NREGA in detail.

> 5 See also Afridi et al. 2016; Das and Singh 2013; Das 2018; Mani et al. 2020.