Can Workfare Programs Moderate Conflict? Evidence from India

Abstract

Can public interventions persistently reduce conflict? Adverse weather shocks, through their impact on incomes, have been identified as robust drivers of conflict in many contexts. An effective social insurance system moderates the impact of adverse shocks on household incomes, and hence, could attenuate the link between these shocks and conflict. This paper shows that a public employment program in India, by providing an alternative source of income through a guarantee of 100 days of employment at minimum wages, effectively provides insurance. This has an indirect pacifying effect. By weakening the link between productivity shocks and incomes, the program uncouples productivity shocks from conflict, leading persistently lower conflict levels.

Nominal Wage Rigidity in Village Labor Markets

“…Null Hypotheses (i) and (ii) follow directly from Lemma 1. For (iii) , it is straightforward to verify from (3) and 4: ∂ w ⁎ (θ, p) /∂ p = w * /p and ∂ L ⁎ (θ, p) /∂ p = 0 . If there is a price increase, firms raise nominal wages to keep real wages constant and employment therefore does not change.…”

“…This has provided compelling documentation in OECD countries (e.g., Akerlof et al 1996;Kahn 1997;Card and Hyslop 1997;Dickens et al 2007;Barattieri, Basu, and Gottschalk 2014;Ehrlich and Montes 2018). 3 However, this approach has made it difficult to directly examine the potential employment effects of rigidities. 4 There 0.5 1 1.5 2 2.…”

Fragility and Conflict: On the Front Lines of the Fight against Poverty

“…In cases where the channels of impact are clear, as with income loss and conflict, social protection through workfare or cash transfer programs can be particularly effective in protecting households that face negative income shocks, thereby reducing conflict risk. Indeed, analysis in India clearly suggests that the countrywide National Rural Employment Guarantee Act, a workfare program that guarantees 100 days of employment at minimum wage for rural households, has had a significant impact in mitigating the risk of conflict by insulating households from income shocks induced by rainfall patterns (Fetzer 2019). In general, policy research on the causes and underlying mechanisms of conflict remains nascent, as does evidence on what works to mitigate the risks of conflict and why.…”

State violence, party formation, and electoral accountability: The political legacy of the Marikana massacre

“…Standard errors m are clustered by municipality, the geographic unit above the ward, which helps to account for spatial auto-correlation in the treatment assignment. The results are virtually unchanged in terms of statistical significance when using robust unit-level standard errors, or the Conley (1999) adjustment for spatial and temporal auto-correlation (Hsiang, 2010;Fetzer, 2014). (1) is a regression estimate equivalent to the simple difference-in-differences calculated above.…”