The Association Between Participation in Mahatma Gandhi National Rural Employment Guarantee Program and Smoking in India.

Abstract

This paper examines whether participating in Mahatma Gandhi National Rural Employment Guarantee Program (NREGA) is associated with the likelihood of smoking among program participants in India. We use two-stage residual inclusion (2SRI) estimation method and two waves of India Human Development Surveys completed before (2005) and after (2012) NREGA implementation. The likelihood of smoking increased with NREGA participation. For every 10% increase in NREGA income, the likelihood of smoking bidis (but not cigarettes) increased by 0.88 percentage point. A bidi, a stick of unprocessed tobacco wrapped in temburini leaves, is a significantly cheaper alternative to cigarettes. Nonparticipants who had a comparable increase in income between the two India Human Development Survey waves did not show an increase in likelihood of smoking. The heterogeneity in NREGA treatment effect shows that smoking tendency is not influenced by caste/religion or literacy. NREGA, as the largest workfare program, most certainly has had a significantly positive influence on the rural poor in India. The findings highlight its small but meaningful influence of a negative health behavior, greater likelihood of uptake of smoking bidis/hookah among program participants. Existing studies have found mixed evidence of an exogenous increase in income among low-income adults and its impact on smoking. No studies to date have tested the influence of workfare programs in rural areas of developing countries, where unemployment rates are higher and a substantial share of population in those areas is poor. Based on participation in employment guarantee programs as a proxy for exogenous increase in guaranteed income among rural population in India, we find that participants in the program were more likely to smoke bidis/hookah but not cigarettes.