RIGHT TO WORK? Assessing India's Employment Guarantee Scheme in Bihar Puja Dutta Rinku Murgai Martin Ravallion Dominique van de Walle
Contents Foreword Acknowledgments About the Autbors Abbreviations Introduction xiii xvii xix xxi xxiii Overview 1 The Bihar Rural Employment Guarantee Schema 7 This Study 12 Main Lessons from the Study 15 Notes 17 References 19 1 Does India's Employment Guarantee Scheme Guarantee Employment? 23 Why an Employment Guarantee Need Not Be Attainable 24 Performance in Meeting the Demand for Work across States 30 Targeting 40 Wages and Rationing on MGNREGS 48 Participation by Women 53 Conclusion 56 Notes 59 References 61 2 Unmct Demand for Work on the Bihar Rural Employment Guarantee Scheme 63 The BREGS Survey 63 Performance in Meeting Demand for Work 66 Annex 2A 71 Notes 77 References 77
VI CONTENTS 3 Who Gets Work? Who Is Left Out? 79 Targeting 82 Determinatus of Participation and Rationing 86 Annex 3A 103 Notes 113 References 114 4 Wages 115 Payment of Wages 116 Wages Received by Households 118 Impact of BREGS on Wages 128 Determinants of Wages 133 Comparing Survey Aggregates with Administrative Data 135 Annex 4A 138 Notes 144 References 144 5 Forgone Employment and Income 147 Forgone Opportunities 148 Forgone Income 149 Forgone Employment and Income as a Result of BREGS 150 Impacts on Migration 153 Notes 154 References 154 6 Impacts on Poverty 157 Impacts on Poverty of the Extra Earnings from BREGS 157 Comparisons with Other Simulated Impacts 161 Perceptions of BREGS 168 Annex 6A 171 Notes 173 Reference 174 7 Reforming the Bihar Rural Employment Guarantec Scheme: Citizen Awareness 175 Registration and Expressing Demand for Work 175 What Do Rural Households Know about BREGS? 179 A Pilot Information Campaign 194 Annex 7A 214 Notes 216 References 217
CONTENTS Vit 8 Reforming the Bihar Rural Employment Guarantee Scheme: Administrative Processes 219 A Closer Look at the Scheme's Administration 220 Understanding the Supply-Side Constraints on Delivery 234 Learning from Experiences Elsewhere 245 Notes 247 References 250 Glossary 253 Index 255 Boxes O.l Key Features of MGNREGS 3 1.1 Effect of Local-Level Costs on Meeting Demand under MGNREGS 27 1.2 Corruption and the Unmet Demand for Work 29 7.1 Are the Transparency Safeguards Adhered To in Practice? 177 8.1 Informed, Participatory Flanning for the Bihar Rural Employment Guarantee Scheme (BREGS) 224 8.2 The Role of the Mukhiya 236 Figures O.l Bihar Rural Employment Guarantee Scheme Flowchart 9 1.1 There Is No Correlation between Participation Rates in MGNREGS and the Incidence of Poverty across Indian States 35 1.2 Demand for MGNREGS Work Is Greater in Poorer States 37 1.3 Poorer States Have Greater Unmet Demand for Work on MGNREGS 37 1.4 There Is Less Rationing at the Margin Than on Average across States 38 1.5 Participation and Rationing by Consumption per Person, Rural India 43 1.6 Targeting Performance Rises with the Overall Participation Rate across States 47 1.7 Participation Rates for Scheduled Tribes, Scheduled Gastes, and Other Backward Classes Rise Faster Than That for "Other" Gastes as the Overall Participation Rate Increases across States 51
Vlll CONTENTS 1.8 Women Get a Larger Share of MGNREGS Work Than of Casual Wage Labor across States 54 1.9 The Share of Work Going to Women Tends to Be Lower in Poorer States 55 1.10 The Share of Work Going to Women Tends to Be Lower in States with Higher Rationing 56 3.1 Participation and Rationing as a Function of Wealth 88 4.1 Delays in Bihar Rural Employment Guarantee Scheme Wage Payments 118 4.2 Wages over Time 121 4.3 Evolution of Bihar Rural Employment Guarantee Scheme Wages and Days Worked over the Entire Survey Period 124 4.4 Density of Daily Casual Wages, by Bihar Rural Employment Guarantee Scheme Participation Status 126 4.5 Wages Relative to the Bihar Rural Employment Guarantee Scheme Stipulated Wage Rate 131 4.6 Actual BREGS Wages Relative to the BREGS Stipulated Wage Rate, by Gender 133 5.1 Distribution of the Ratio of Self-Assessed Forgone Days to Public Works Days and Ratio of Forgone Wages to Public Works Wages 152 6.1 Impacts on Participants' Poverty in Round 1 159 6.2 Poverty Impact Graph for Public Works Participants and the Whole Population 160 6.3 Poverty Impact Graph with 50 Percent Lower Forgone Income 162 6.4 Poverty Impact Graph without Forgone Income 163 6.5 Impacts on Poverty under Idealized Bihar Rural Employment Guarantee Scheme 165 8.1 Selection of Bihar Rural Employment Guarantee Scheme Works 221 8.2 Worksite Facilities in Round 2 230 8.3 Utilization of Available Resources across Districts 241 Tables 0.1 Summary Statistics on the Bihar Rural Employment Guarantee Scheme from Administrative Data 10 1.1 Summary MGNREGS Statistics, 2009/10 33 1.2 Program Expenditure per Capita across States 36
CONTENTS ix 1.3 Coverage of MGNREGS across Consumption Quintiles, 2009/10 42 1.4 Targeting Performance of MGNREGS across States 46 1.5 Participation Rates and Targeting by Social Group 49 1.6 Average Wages on MGNREGS and in Casual Labor, 2009/10 52 1.7 Regression Results for Female Share of Employment in MGNREGS 57 2.1 Sample Sizes in Bihar Rural Employment Guarantee Scheme Survey 65 2.2 Summary of Participation, Demand, and Rationing 67 2.3 Joint Distribution of Program Participation across the Two Survey Rounds 68 2.4 Days of Employment Provided and Demanded in the Past Year 70 2.5 Household Perceptions about Why They Were Rationed 70 2A.1 Distribution of Households and Individuais across Strata (Round 1) 74 2A.2 Sample Size (Rounds 1 and 2) 75 2A.3 Variable Definitions 76 3.1 Characteristics of Participants, Excess Demanders, and the Rest, Round 1 80 3.2 Coverage of Bihar Rural Employment Guarantee Scheme across Consumption Quintiles of Rural Bihar 83 3.3 Coverage of the Bihar Rural Employment Guarantee Scheme across Social Croups of Rural Bihar 85 3.4 Targeting Differentials by Poverty Status and Social Group 86 3.5 Regressions for Household Participation, Demand, and Assignment of Work 90 3.6 Individual-Level Determinants of Days Worked on the Bihar Rural Employment Guarantee Scheme in Round 1 99 3A.1 Participation and Demand for Work by Household Asset Group 103 3A.2 Effects of Gram Panchayat Attributes on Participation by Asset Group 107 3A.3 Individual-Level Participation, Demand, and Assignment of Work 108 4.1 Daily Wage Rate for the Week before Interview 120
CONTENTS 4.2 Average Wage Rates before and after Increases in the Bihar Rural Employment Guarantee Scheme Stipulated Wage 123 4.3 Daily Wages for Farm and Nonfarm Casual Labor in Bihar from the 2009/10 National Sample Survey, by Subround 125 4.4 Sample Total Person Days of Non-Public Works Work by Operation and Subround, 2009/10 130 4.5 Wages and Employment Comparison between Survey Data and Administrative Data 137 4A.1 The Determinants of BREGS and Non-BREGS Casual Wages at the Individual Level 138 5.1 Forgone Work Opportunities Identified by Bihar Rural Employment Guarantee Scheme Participants 149 5.2 Forgone Wages for Casual Work Compared with Actual Wages for Those Working in the Same Month 151 5.3 Migration Impact of Bihar Rural Employment Guarantee Scheme 153 6.1 Summary of Estimated Poverty Impacts Holding Total Public Spending Constant 167 6.2 Summary Statistics on Perception Variables 169 6A.1 Perceptions among Nonparticipants 171 7.1 Not All Households That Want a Job Card Have One 176 7.2 Notion of "Demanding" Work Is Weak but Improving 178 7.3 Summary Statistics of Knowledge of Bihar Rural Employment Guarantee Scheme Rules 180 7.4 Regression for Knowledge of Bihar Rural Employment Guarantee Scheme Rules in Round 1 185 7.5 Estimates of the Effect of the Movie on Knowledge about the Bihar Rural Employment Guarantee Scheme by Gender 197 7.6 Estimates of the Effect of the Movie on Perceptions and Bihar Rural Employment Guarantee Scheme Participation by Gender 200 7.7 Effects of the Movie on Learning about the Bihar Rural Employment Guarantee Scheme 205 7.8 Tests for Heterogeneity in the Impacts of the Movie 208 7A.1 Knowledge among Participants, Excess Demanders, and the Rest 214 8.1 Percentage of Bihar Rural Employment Guarantee Scheme Expenditure by Type of Project, 2008/09 222
CONTENTS XI.2 Participant Reports about the Worksite 228.3 Time Taken for Payment of Wages after Work Completion 231.4 Percentage of Rural Households with Accounts at Financial Institutions 233.5 Percentage of Participants Reporting Wage Payments through Various Sources at the Last Worksite 233.6 Flow of Funds 238