Raising Consumption Through India's National Rural Employment Guarantee Scheme

The Indian National Rural Employment Guarantee Scheme is one of the world's largest public works programs aimed at reducing poverty. I exploit the cross-district rollout of the program to analyze the causal effect on household consumption. I use the National Sample Survey data to conduct a difference-in-difference analysis where the treatment group consists of households in 184 early implementation districts and the control group consists of households in 209 late implementation districts. The program significantly raised household per capita consumption by around 10 percent. Although households predominantly use the program during the lean agricultural season, I find consumption increased both during the lean and non-lean agricultural season, and households continued to smooth consumption over the year. For the marginalized caste group, the program increased consumption by around 12 percent. Therefore, historical and ongoing discrimination along with other barriers to entry have not prevented this group from benefiting from the program