Whether MGNREGS has affected agricultural wage rate in Andhra Pradesh? A panel modeling across 23 districts from 2000 to 2011, Socioeconomics Discussion Paper Series 27

Bhattarai, M and Kumar, R and Sandhya, S and Bantilan, C (2014) Whether MGNREGS has affected agricultural wage rate in Andhra Pradesh? A panel modeling across 23 districts from 2000 to 2011, Socioeconomics Discussion Paper Series 27. [Socioeconomics Discussion Paper Series]

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Abstract

The Impact of Mahatma Gandhi National Rural Employment Guarantee Schemes (MGNREGS) on agricultural labour supply and agricultural wage rate is a hotly debated public policy concern in India. The available literature on the topic has provided mixed findings, which motivated the authors to carry out this study. In 2011-2012, about 12 % of the national annual budget of MGNREGS was spent in Andhra Pradesh (AP); therefore, we have chosen AP for this study. Panel data from 23 districts of AP for 2000 to 2011 were used in fixed effect form of panel model, with weighted least square regression model to correct for heteroskedasticity errors across the districts. We have analyzed impact of MGNREGS on both agricultural and non-agricultural wage rates (carpenter wage rate), and separately for male and female agricultural wage rate. This is done taking into account of marginal impact of other major determinants of agricultural wage rates. Our study shows that the wage rate for men are consistently higher than that of women labour force in Andhra Pradesh; instead of convergence, the divergence trend has further widen after 2006 onward. The results from panel model suggest that agricultural wages are positively impacted by rise on non-farm sector wage (proxy as carpenter wage rate), irrigation intensity, number of households covered by the MGNREGS program, and increased per capita income level in a district. Even though MGNREGS contributions to rise in male agricultural wage rate is positive and statistical significant, but its size of economic impact (elasticity) is weaker than many other factors like skill non-farm wage rate level. The study suggests that the agricultural wage in a place in India influenced more by growth on non-farm sector activities (measured by carpenter wage rate) than many other conventional factor determinants of wage. The study findings contribute on improved empirical evidences on important policy debates on recent hike on agricultural wage rate in India.

Item Type: Socioeconomics Discussion Paper Series
Divisions: RP-Market Institutions and Policies
CRPS: CGIAR Research Program on Policies, Institutions, and Markets
Series Name: Socioeconomics Discussion Paper Series 27
Uncontrolled Keywords: Agricultural wage rate, MGNREGS, Gender, District level Panel data analyses, Andhra Pradesh, India
Subjects: Others > Agriculture-Farming, Production, Technology, Economics
Depositing User: Mr B K Murthy
Date Deposited: 15 Dec 2014 08:04
Last Modified: 23 Sep 2015 04:05
URI: http://oar.icrisat.org/id/eprint/8408
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