The Impact of NREGS on Urbanization in India

30 Pages Posted: 23 Aug 2012 Last revised: 6 Mar 2013

See all articles by Shamika Ravi

Shamika Ravi

Brookings Institution

Mudit Kapoor

Indian School of Business

Rahul Ahluwalia

Indian School of Business (ISB), Hyderabad

Date Written: August 15, 2012

Abstract

This paper tests the impact of National Rural Employment Guarantee Scheme (NREGS) on rural-urban migration and urban unemployment in India. We use the Harris-Todaro framework to analyze labor market outcomes of this policy intervention. Using data from two rounds of National Sample Survey, we exploit quasi experiment setting where the NREGS was launched in phases across districts, over time. Results show that the NREGS reduced rural-urban migration and urban unemployment in India. Results are heterogeneous as this job scheme reduced migration for employment and marriage, but not for education. It lowered migration of unskilled labor but did not affect skilled labor.

Suggested Citation

Ravi, Shamika and Kapoor, Mudit and Ahluwalia, Rahul, The Impact of NREGS on Urbanization in India (August 15, 2012). Available at SSRN: https://ssrn.com/abstract=2134778 or http://dx.doi.org/10.2139/ssrn.2134778

Shamika Ravi (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

Mudit Kapoor

Indian School of Business ( email )

Hyderabad, Gachibowli 500 019
India

Rahul Ahluwalia

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

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