India’s Rural Employment Guarantee Scheme: Has it Reduced Poverty in Chitradurga District of Karnataka?

In this paper, we evaluate India’s flagship rural employment guarantee programme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), by answering questions such as whether the MGNREGS wages have been above their reservation wages. Furthermore, we estimate the reservation wages as a function of individual and labour market characteristics, being the first study to do this in the Indian context and compute net benefits from MGNREGS jobs. Next, we understand what demand-side (individual) and supply-side (programme) characteristics determine enrolment in the programme and determine MGNREGS wages.