Income Shocks, Public Works and Child Nutrition

Uttara Balakrishnan, University of Maryland

There has been a renewed interest in public works programs recently. While their causal impact on wages and employment has been well researched, there is limited evidence on how these programs affect children. In this paper, I analyze the functioning of the National Rural Employment Guarantee Scheme (NREGS) in India as a nutritional safety net for children. Income shocks have detrimental consequences on child health. Studying the role of the NREGS in mitigating the impacts of such shocks on children thus becomes important. The main finding that emerges is that the NREGS does indeed serve as a buffer against income shocks, particularly for boys. Paradoxically, richer households seem to benefit more, suggesting significant rent seeking. However those with small land holdings also seem to do better. Thus, while on the whole the NREGS is quite effective in altering the situation of the poor during crises, there are strong heterogeneous impacts.