Impact of the NREGS on Schooling and Intellectual Human Capital

This paper uses a quasi-experimental framework to analyze the impact of India’s largest public works program, the National Rural Employment Guarantee Scheme (NREGS), on schooling enrollment, grade progression, reading comprehension test scores, writing test scores, math test scores and Peabody Picture Vocabulary Test (PPVT) scores. The availability of pre and two rounds of post-intervention initiation data from the three rounds of the Young Lives Panel Study allow us to measure both the short- and medium-run intent-to-treat effects of the program. We find that the program has no effect on enrollment but has strong positive effects on grade progression, reading comprehension test scores, math test scores and PPVT scores. The average effect size computed over several outcomes is similar to the effects of conditional cash transfer programs implemented in Latin America. These short-run impact estimates all increased in the medium run, that is, there is no decaying of impact but instead medium-run augmentation of the estimated short-run effects. The findings reported here are robust to attrition bias, endogenous program placement, type I errors and type II errors.