Determinants and persistence of benefits from the National Rural Employment Guarantee Scheme – panel data analysis for Rajasthan, India

Abstract

India’s National Rural Employment Guarantee Scheme (NREGS) has been hailed as one of the country’s most creative social initiatives. Since the program was begun only recently (in 2004–2005) there is a need to assess household access to this program and persistence of benefits to households not just in one year but over time. Using a unique panel data set for 2007–2008 and 2009–2010 for the Indian state of Rajasthan, this paper analyzes the transitions into and out of NREGS. It models the impact of such transitions on earnings of workers as well the determinants of such transitions. To the best of our knowledge this is the first study of this kind. Several policy conclusions are advanced.