The power of employment: Effects of India’s employment guarantee on women empowerment

Abstract

• I collect annual district level data across India to estimate the effect of MGNREGA employment on women empowerment. • I use annual district level data on women demand for microfinance through self-help groups and incidents of sexual harassment and interpersonal violence as my indicators for women empowerment. • Using a difference-in-differences model, results indicate that the demand for microfinance among women increases and violence against women decreases as MGNREGA employment increases in a district. • These results align with a broad literature on the benefits of MGNREGA, which identifies important changes to household decision-making as women earn income across India. In many countries, women do not share the same decision-making power as the men around them. This preexisting discrimination suggests an imbalance in decision-making power in the household, which makes empowering the role of women a necessity for the health and development of our communities. Studies have noted how income growth across genders can shift decision-making power in the household. To investigate income growth and its effect on women empowerment, I analyze the Mahatmas Gandhi Employment Guarantee Act of 2005, which offers guaranteed employment to rural households throughout India. Its gradual implementation in three phases over a two year period allows for the use of a difference-in-differences analysis regarding the effects of guaranteed employment by men and women across districts. I analyze two outcomes variables related to women empowerment beginning in 2002 to 2017, including the demand for microfinance and violence against women. Results show that as women take up employment in a district, the demand for credit and savings increases and violence against women decreases. Each result aligns with a broad literature that identifies how income growth and employment empowers the health, social, and economic of status of women.