Working Paper: Employment Guarantee during Times of COVID-19: Pro-poor and Pro-return-migrant?

Author: Sudha Narayanan, Christian Oldiges and Shree Saha

Title: Employment Guarantee during Times of COVID-19: Pro-poor and Pro-return-migrant?

Abstract: Worldwide, the COVID-19 pandemic has disrupted economies rendering millions without employment. A number of countries have turned to labour market interventions to protect workers. India leverages on a workfare programme, the MGNREGA, to provide a fallback option for workers in rural areas. Established long before the pandemic and designed to be demand-driven and self-targeting, we examine its expansion in 2020 as a COVID-19 response. We combine monthly administrative data with district-level data on migration and multidimensional poverty. We test whether the additional person-days in public works employment generated are distributed across districts in ways that are commensurate with their population shares of out-migration and poverty. This yields four major findings. First, poorer districts appear to have extended the programme to include more households, i.e. expanded on the extensive margin. Second though, this does not seem to hold for districts with a high proportion of all out-migrants in the country. While these districts account for 72.2% of all out-migrants, they account for only 54.8% of the person-days generated. Third, in these districts, unmet demand for work is higher than elsewhere. Given widespread administrative rationing, of 22.7% in the period May-August 2020, the increase in person-days has been as much on the intensive margin as it has been on the extensive margin. Fourth, the person-days generated per rural household suggest that the expansion is far from adequate in serving the large number of households likely pushed into economic distress in specific districts. Between May and August 2020, the employment guarantee provided 31 days per working household, yet this is equivalent to just 13.5 days per rural household. Districts that are poor or account for a higher out-migration share are not differentially ramping up the programme; instead implementation patterns are consistent with past records of person-days generated or rationing rates. Notwithstanding the impressive expansion of the workfare programme, it needs continued funding and attention to fulfill its promise as a credible safety net, especially in districts that need it most.

Keywords: COVID19, MGNREGA, workfare, India, out-migration

JEL Code: J08; I38