Study: India’s National Rural Employment Guarantee Scheme has positive impact on participants’ welfare

India’s National Rural Employment Guarantee Scheme (NREGS) is one of the largest public works programs globally. The new study analyses impact of NREGS on key welfare measures of its beneficiaries – consumption expenditure, nutritional intake, and asset accumulation.

With a budget of US$7.47 billion in 2017–18, India’s National Rural Employment Guarantee Scheme (NREGS) is one of the largest programs of its kind globally. The program guarantees employment for up to 100 days per year for each rural household with wages equal for men and women. Thus, it not only serves as a form of employment insurance but also has the potential to enhance female empowerment. To ensure transparency, NREGS makes all work-related data available on the Internet, deposits payments directly into beneficiaries’ accounts, and conducts regular social audits.

In their new paper, Klaus Deininger (The World Bank) and Yanyan Liu (IFPRI) undertake an empirical analysis of the program’s impact on participants’ welfare, finding that – after one-year exposure – it improves participants’ nutrition and – after two years – their ability to accumulate nonfinancial assets. The study also shows that poor and marginalized households benefit the most from NREGS.