The Impact of India's Rural Employment Guarantee on Demand for Agricultural Technology

The Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) is approaching eight years of implementation. Since 2006, it has offered up to 100 days per year of guaranteed public works employment to tens of millions of rural Indian households. It is intended to augment the purchasing power of the rural poor during droughts and slack agricultural production periods. Given its scale, it has the potential to generate additional ripples throughout the rural economy. Recent working papers have explored NREGA’s effect of higher agricultural wages. This paper investigates whether this increase in the opportunity cost of agricultural labor incentivizes farm owners to adopt labor-saving agricultural technology.