Show simple item record

dc.contributor.authorBahal, G.
dc.contributor.authorShrivastava, A.
dc.date.accessioned2017-02-16T10:14:41Z
dc.date.available2017-02-16T10:14:41Z
dc.date.issued2016-12-14
dc.identifier.otherCWPE1669
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/262558
dc.description.abstractRecent evidence suggests that large employment guarantee schemes in India have increased private wages. Juxtaposed with this body of work are studies that show how the lack of administrative capacity, political will, and other supply factors cause program provision to be rather limited and highly variable across districts and over time. This paper attempts to understand the cost of variability in program provision in terms of the labor market outcomes. We find that in the presence of downward wage rigidity, forward-looking employers compress wage increases today because of the uncertainty regarding the level of program provision in the future. Our theory generates two key empirically verified predictions: (i) greater variability in program provision results in a larger compression of wage increases; and (ii) that compression of wage increases is more severe in districts where inflation is low relative to where inflation is high. This has important policy implications as we show that by simply reducing the variability in program provision, without increasing the average expenditure, can be welfare enhancing.
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectEmployment guarantee
dc.subjectwage rigidity
dc.subjectuncertainty
dc.subjectwelfare
dc.subjectNREGA
dc.subjectIndia
dc.titleLabor Market Effects of Inconsistent Policy Interventions: Evidence from India's Employment Guarantees
dc.typeWorking Paper
dc.identifier.doi10.17863/CAM.7824


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record