Employment Guaranteed? Social Protection During a Pandemic

34 Pages Posted: 16 Feb 2021 Last revised: 19 May 2022

See all articles by Farzana Afridi

Farzana Afridi

Indian Statistical Institute, Kolkata

Kanika Mahajan

Ashoka University

Nikita Sangwan

Indian Statistical Institute, New Delhi

Abstract

The Covid-19 pandemic has highlighted the potential of social protection programs in mitigating labor market shocks. We examine the role of one of the world's largest employment guarantee schemes, India's MG-NREGA, in cushioning job losses in one of the worst affected economies due to the pandemic. Our findings indicate that regions with greater historical state capacity to provide public workdays under the scheme generated relatively higher employment during the pandemic. Consequently, an increase in state capacity by one MG-NREGA workday per rural inhabitant in a district reduced job losses in rural areas in April-August 2020 by 7% overall and by 74% for rural women, over baseline employment rate. These cushioning effects strengthened as the mobility restrictions eased and were larger for women who were less mobile and less skilled. Our results suggest that employment guarantee programs can protect livelihoods, but for certain demographic groups relatively more than others depending on the nature and skill level of work offered.

Keywords: COVID-19, employment, public employment guarantee, MG-NREGA, women

JEL Classification: J68, H31

Suggested Citation

Afridi, Farzana and Mahajan, Kanika and Sangwan, Nikita, Employment Guaranteed? Social Protection During a Pandemic. IZA Discussion Paper No. 14099, Available at SSRN: https://ssrn.com/abstract=3785063

Farzana Afridi (Contact Author)

Indian Statistical Institute, Kolkata ( email )

203 B.T. Road
Kolkata, West Bengal 700108
India

Kanika Mahajan

Ashoka University ( email )

University Campus, Plot #2,
Rajiv Gandhi Education City
Kundli, Haryana 131028
India

Nikita Sangwan

Indian Statistical Institute, New Delhi ( email )

7 S. J. S. Sansanwal Marg
New Delhi, 110016
India

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