Saraswat, Deepak (2011): Effect of employment guarantee on access to credit: Evidence from rural India.
Download (1MB) | Preview
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is the largest and most ambitious public works program for poverty alleviation, adopted by Government of India since independence. It was implemented in year 2006, starting with the first phase of 200 most backward districts in India. Two more consecutive phases were implemented to cover all rural regions in India but, even after almost 6 years of its implementation, it has not been adequately analyzed for its effect on various development indicators. This paper aims to study, whether participating in a typical employment guarantee program like MGNREGA, increases access to financial services and in particular, credit. Results provide evidence that, MGNREGA has been successful in self-selecting rural poor into participation and households participating longer in the program have been able to borrow more from formal sources. This paper also provides evidence that, increase in productivity of economic activities for participants, due to work in MGNREGA acts as a link between longer participation and increased access to formal credit.
|Item Type:||MPRA Paper|
|Original Title:||Effect of employment guarantee on access to credit: Evidence from rural India|
|Keywords:||MGNREGA, Access to Credit|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure
C - Mathematical and Quantitative Methods > C0 - General
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General
C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C87 - Econometric Software
C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design
|Depositing User:||Deepak Saraswat|
|Date Deposited:||13. Nov 2011 10:51|
|Last Modified:||08. Oct 2015 04:46|
Acharya, S., and V. G. Panwalkar. "The Employment Guarantee Scheme in Maharashtra: Impact on Men and Women Workers." Regional Research Paper, Bangkok, 1988.
Ahmed, Raisuddin, and Mahabub Hossain. "Infrastructure and Development of a Rural Economy." Working Paper, Washington D.C., 1987.
Aleem, I. "Imperfect Information,Screening,and the Cost of informal Lending: A Study of a Rural Credit Market in Pakistan." In The economics of rural organization;theory,practice,and policy, by Hoff and Stiglitz, 131-154. Oxford: Oxford University Press, 1993.
Asian Development Bank. "Finance for the Poor: Microfinance Development Strategy." Report, Manila, 2000.
Bardhan, P.K, and A. Rudra. "Interlinkage of land, labour and credit relations: An analysis of village survey data in East India." Economic and Political Weekly, 1978: 367-384.
Barrett, C.B, M.R. Carter, and M. Ikegami. Poverty traps and social protection. Discussion paper, World Bank, 2008.
Basu, Priya. Improving Access to Finance for India's Rural Poor. Washington D.C.: World Bank, 2006.
Bhende, Walker, Lieberman, and Venkataram. "EGS and the Poor,Evidence from Longitudinal Village Studies." Eonomic and Political Weekly, 1992. Bianchi, Milo. Credit Constraints, Entrepreneurial Talent, and Economic Development. Research Paper, World Institute for Development Economic Research, 2009.
Binswanger, H.P. "Attitudes toward Risk:Experimental Measurement in Rural India." American Journal of Agricultural Economics, 1980: 395-407.
Binswanger, Hans, et al. "Common Features and Contracts in Labor Relationsin the Semiarid Tropics of India." In Contractual Arrangements, Employment,and Wages in Rural Labor Markets in Asia, by H.P Binswanger and M.R Rosenzweig. New Haven: Yale University Press, 1984.
Carter, M., and M. Ikegami. "Looking Forward: Theory-based Measures of Chronic Poverty and Vulnerability." In Poverty Dynamics: Interdisciplinary Perspectives, by T. Addison, D. Hulme and R. Kanbur. Oxford: Oxford University Press, 2009.
Chowdhury, Noimuddin, and M. Asaduzzaman. "Benefits of the Rural Works Programme under RD - 1: An Indicative Assessment." Bangladesh Development Studies, 1983: 227-235.
Conning, J., and C. Udry. Rural financial markets in developing countries. 2007.
Dandekar, Kumudini. Employment Guarantee Scheme: An Employment Opportunity for Women. Bombay: Gokhale Institute Studies, 1983.
Dandekar, Kumudini, and Sathe Manju. "Employment Guarantee Scheme and Food for Work Programme." Economic and Political Weekly, 1980: 707-713.
Datt, and Ravallion. "Transfer Benefits from Public -Works Employment:Evidence for Rural India." The Economic Journal (The Economic Journal ), 1994: 1346-1369.
Dercon, Stefan. "Wealth, risk and activity choice:cattle in western Tanzania." Journal of Development Economic, 1998: 1-42.
Doan, Gibson, and Mark. "What determines credit participation and credit constraints of thr poor in pre-urban areas, Vietnam?" December 17, 201. http://mpra.ub.uni-muenchen.de/27509/ (accessed August 20, 2011).
Draze, J, and A.K Sen. Hunger and Public Action. Oxford: Oxford University Press, 1989.
Eswaran, M., and A. Kotwal. "Access to Capital and Agrarian Production Organisation." Economic Journal, 1986: 482-498.
Fafchamps, M, and J Pender. "Precautionary Savings,credit constraints,and irreversible investment:Evidence from semi-arid India." Journal of Business and Economic Statistics, 1997: 180-194.
Fernando, N.A. Low Income Households' Access to financial services: International Experience, Measures for improvement and the future. Special Studies, Asian Development Bank, 2007.
Friedman, M. A theory of the consumption function. Princeton: Princeton University Press, 1957.
Gaiha, R, and K Imai. "Maharashtra Employment Guarantee Scheme." Policy Brief 6, London, 2006.
Government of India. The National Employment Guarantee Act 2005. Operational Guidelines, Ministry of Rural Development, 2008.
ISWSD. "Impact of National Rural Employment Guarantee Scheme on the Living and Working Conditions of Women in Rural India." Survey Report, 2006.
Johnson, Doug. Does NREGA help rural poor to cope with bad weather? Working Paper 32, Chennai: Center for Microfinance, Institute of Financial Management and Research, 2009.
Kotwal, A, and M Eswaran. "Credit as Insurance in Agrarian Economics." Journal of Development Economics, 1989: 37-53.
McKinnon, R. Money and Capital in Economic Development. Published, Washington D.C.: The Brookings Institution, 1973.
Mehrotra, S. "NREGA Two Years On: Where do we go from here?" Economic and Political Weekly, 2008.
"MGNREGA Outcomes for 2009 - 2010." Netnrega. September 12, 2011. http://184.108.40.206/Netnrega/mpr_ht/nregampr_dmu.aspx?flag=1&page1=S&month=Latest&fin_year=2009-2010 (accessed September 12, 2011).
"MGNREGS outcomes for AP." nrega.ap.gov. 2011. http://nrega.ap.gov.in/Nregs/Home_eng.jsp (accessed September 11, 2011).
Morduch, J. "Income smoothing and consumption smoothing." The Journal of Economic Perspectives, 1995: 103-114.
Murgai, R, and M Ravallion. "Employment Guarantee in Rural India." Economics and Political Weekly, 2005.
Ninno, Carlo del, K Subbarao, and A Milazzo. "How to make Public Works work: A review of the experiences." Unpublished Mimeo, 2009. "Notifications RBI/2005-06/204." Reserve Bank of India. 2005. http://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2615&Mode=0 (accessed July 23, 2011).
"nrega.net." MORD - Guidelines. 2009. http://www.nrega.net/csd/convergence-guidelines/guideline_conver_MOA.pdf (accessed August 20, 2011).
NREGA: Opportunities and Challenges. Survey Report, New Delhi: Centre for Science and Environment, 2008.
"Promote No-frills Accounts." Business Line, September 26, 2006.
Raisuddin, Ahmed, Omar Chowdhury, Mahabub Hossain, Shubh Kumar, and
M.Abul Quasem. "Development Impact of the Food for Work Program in Bangladesh:Tehnical Papers." Dhaka and Washington D.C., 1985.
Ravaillon, M. "Land-Contingent Poverty Alleviation Schemes." World Development 17, 1989: 1223-1233.
Ravallion, M. Reaching the Poor through Rural Public Employment: Arguments, Evidence and Lessons from South Asia. The World Bank Research Observer, 1991.
RFAS. Rural Finance Access Survey. New Delhi: National Council for Applied Economic Research, 2003.
Rosenzweig, M.R, and K.I Wolpin. "Credit market constraints, consumption smoothing and the accumulation of durable production assets in low income countries:Investment in bullocks in India." Journal of Political Economy, 1993: 223-244.
Rutherford, Stuart. The Poor and thier Money. New Delhi: Oxford University Press, 2000.
Silva, J.S, and S Tenreyo. "The log of gravity." Review of Economics and Statistics, 2006: 641-658.
Song, Maikel Lieuw-Kie, and Kate Philip. Mitigating a job crisis: Innovations in public employment programmes(IPEP). Employment Report, Employment Sector, ILO, 2010.
Subbarao, K. Interventions to Combat Household-Level Food Insecurity: A review of India's experience. Washington D.C.: World Bank, Population and Human Resources Department, 1989.
Uppal, Vinayak. Is NREGA a safety net for children? Young Lives Student Papers, Department of International Development, University of Oxford, 2009.
Wallker, Thomas S., and Ryan G. James. "Village and Household Economies in India's Semi-Arid Tropics." Baltimore: Johns Hopkins University Press, 1990.
World Savings Bank Institute(WSBI). Access to Finance Resolution. Brussels: WSBI, 2004.
Zingales, L., and R. Rajan. Saving Capitalism from the Capitalists. New Jersey: Princeton University Press, 2004.