Abstract
India’s National Rural Employment Guarantee Act (NREGA), the world’s largest public works program, has been demonstrated to have beneficial impacts on a wide range of outcomes, but its effects on agricultural productivity have been relatively understudied (Sukhtankar, 2017). We test whether NREGA modulates the impact of adverse weather shocks on agricultural yields. Our empirical strategy exploits the staggered rollout of NREGA and random fluctuations in weather. Using nationwide data, we find evidence that NREGA slightly increases yields in years with average rainfall, but that it also makes yields more sensitive to low rainfall shocks. Our results highlight the importance of understanding how social protection programs influence agricultural productivity and how they interact with weather shocks.
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