Employment effects of an emergency assistance package for migrants displaced by COVID‐19 in India

Abstract

This paper examines the employment effects of an emergency assistance package by the Indian government, the Garib Kalyan Rozgar Abhiyaan that had the sole objective of providing employment to returning migrants. It was targeted to 116 districts that had seen returning migrants in excess of 25,000, was limited in duration to 4 months, and was directed at top‐up funding to public works and 25 other target sectors in rural areas. Using a sharp RD approach, we find that the intervention had substantive impacts on employment and in reducing rationing in public works and that it did so in a cost‐effective manner. In contrast to the widespread impression of a slow‐moving bureaucracy, these results point to an administrative machinery that was able to successfully implement this project within a relatively short period of time.

Lessons from a time of upheaval: COVID‐19 in South Asia

“…A notable example of private sector data is the Consumer Pyramids Household Survey (CPHS) collected independently by the Centre for Monitoring the Indian Economy (CMIE), a private entity. Despite limitations regarding representativeness and methodological departures from official statistics (Drèze & Somanchi, 2021b), researchers of India have come to rely heavily on the CPHS, including the authors of three papers in this Special Issue (Gupta et al, 2023;Ramachandran & Deshpande, 2023;Varshney & Meenakshi, 2023). The unprecedented nature of the COVID-19 pandemic justified researchers' efforts to extract meaning from limited data that were by no means ideal for economic analysis.…”

“…Instead, much of the rest of the literature relies on non‐experimental techniques. Papers in this issue follow that trend, adopting a range of statistical techniques such as difference‐in‐differences (Ahmed et al, 2023; Gupta et al, 2023; Siwach et al, 2023) or regression discontinuity designs (Varshney & Meenakshi, 2023) to establish causality. Others leverage the randomized allocation of resources pre‐pandemic to uncover the longer‐term impact of these interventions on households' ability to cope with COVID‐19 (Ekstrom et al, 2023).…”

“…In the Indian context, evidence suggests that variation in the ability of states to implement the large national workfare program, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is related more to historical performance and state capacity than demand. In contrast to this notion of a languid administration, Varshney and Meenakshi (2023) find that states within India rose to the occasion and the expansion of MGNREGA had substantive impacts on employment. Moreover, the MGNREGA proved to be cost‐effective as well.…”

“…Davies et al (2023) note the challenges of the Pakistani Government to identify the new poor for the enhanced cash transfer program. In contrast, Varshney and Meenakshi (2023) highlight the potential of the MGNREGA, a universal scheme that self‐selects participants without the state trying to identify and target individual beneficiaries. Whether universal programs fare better in these circumstances is a question that needs further consideration (see Banerjee et al, 2022 for a discussion on targeting in general).…”

“…Kharel et al (2023) document the key role of migration and remittances as coping strategies of rural households in Nepal and Bangladesh; Siwach et al (2023) note the role of women's collectives in India. Other papers highlight the role of social protection, including cash transfers in Bangladesh (Ahmed et al, 2023), a rural workfare guarantee in India (Varshney & Meenakshi, 2023), and a livestock transfer program in Nepal (Ekstrom et al, 2023). Two papers provide an assessment on the impact of the pandemic on vulnerable groups: Seager et al (2023) examine adolescent hunger in Bangladesh, and Ramachandran and Deshpande (2023) discuss the heterogenous impacts of the pandemic on employment outcomes in India.…”