General Equilibrium Effects of (Improving) Public Employment Programs: Experimental Evidence from India

78 Pages Posted: 18 Sep 2017

See all articles by Karthik Muralidharan

Karthik Muralidharan

University of California, San Diego (UCSD)

Paul Niehaus

University of California, San Diego (UCSD)

Sandip Sukhtankar

Dartmouth College

Date Written: September 2017

Abstract

A public employment program's effect on poverty depends on both program earnings and market impacts. We estimate this composite effect, exploiting a large-scale randomized experiment across 157 sub-districts and 19 million people that improved the implementation of India's employment guarantee. Without changing government expenditure, this reform raised low-income households' earnings by 13%, driven primarily by market earnings. Real wages rose 6% while days without paid work fell 7%. Effects spilled over across sub-district boundaries, and adjusting for these spillovers substantially raises point estimates. The results highlight the importance and feasibility of accounting for general equilibrium effects in program evaluation.

Suggested Citation

Muralidharan, Karthik and Niehaus, Paul and Sukhtankar, Sandip, General Equilibrium Effects of (Improving) Public Employment Programs: Experimental Evidence from India (September 2017). NBER Working Paper No. w23838. Available at SSRN: https://ssrn.com/abstract=3038666

Karthik Muralidharan (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Paul Niehaus

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Sandip Sukhtankar

Dartmouth College ( email )

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