Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 73
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 74
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

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		&#039;title&#039; =&gt; &#039;Unintended Consequences Of NREGS -Shailesh Chitnis&#039;,
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-Outlook
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;,
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	&#039;title&#039; =&gt; &#039;Unintended Consequences Of NREGS -Shailesh Chitnis&#039;,
	&#039;subheading&#039; =&gt; &#039;&#039;,
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-Outlook
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;
$disp = &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;
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Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.





&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;





This rather depressing assessment of the field is the opening sentence..."/>
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                <strong>Unintended Consequences Of NREGS -Shailesh Chitnis</strong></h1>
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                <div style="text-align: justify">-Outlook</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</div><div style="text-align: justify">First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The reality for India is somewhere in between. The challenge is finding that point.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Papers referenced in this article:</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://scholar.harvard.edu/files/steinberg/files/paper.pdf</div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803</div>               </font>
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-Outlook
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&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;,
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	&#039;id&#039; =&gt; (int) 29877,
	&#039;title&#039; =&gt; &#039;Unintended Consequences Of NREGS -Shailesh Chitnis&#039;,
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-Outlook
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;
$disp = &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;
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Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.





&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;





This rather depressing assessment of the field is the opening sentence..."/>
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                <strong>Unintended Consequences Of NREGS -Shailesh Chitnis</strong></h1>
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                <div style="text-align: justify">-Outlook</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</div><div style="text-align: justify">First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The reality for India is somewhere in between. The challenge is finding that point.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Papers referenced in this article:</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://scholar.harvard.edu/files/steinberg/files/paper.pdf</div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803</div>               </font>
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    <link rel="canonical" href="https://im4change.in/<pre class="cake-error"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67fb0d7be0592-trace').style.display = (document.getElementById('cakeErr67fb0d7be0592-trace').style.display == 'none' ? '' : 'none');"><b>Notice</b> (8)</a>: Undefined variable: urlPrefix [<b>APP/Template/Layout/printlayout.ctp</b>, line <b>8</b>]<div id="cakeErr67fb0d7be0592-trace" class="cake-stack-trace" style="display: none;"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67fb0d7be0592-code').style.display = (document.getElementById('cakeErr67fb0d7be0592-code').style.display == 'none' ? '' : 'none')">Code</a> <a href="javascript:void(0);" onclick="document.getElementById('cakeErr67fb0d7be0592-context').style.display = (document.getElementById('cakeErr67fb0d7be0592-context').style.display == 'none' ? '' : 'none')">Context</a><pre id="cakeErr67fb0d7be0592-code" class="cake-code-dump" style="display: none;"><code><span style="color: #000000"><span style="color: #0000BB"></span><span style="color: #007700">&lt;</span><span style="color: #0000BB">head</span><span style="color: #007700">&gt;
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-Outlook
&lt;/div&gt;
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&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
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&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
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&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;,
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	&#039;id&#039; =&gt; (int) 29877,
	&#039;title&#039; =&gt; &#039;Unintended Consequences Of NREGS -Shailesh Chitnis&#039;,
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-Outlook
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
The reality for India is somewhere in between. The challenge is finding that point.
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;em&gt;Papers referenced in this article:&lt;/em&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
&lt;br /&gt;
&lt;/div&gt;
&lt;div style=&quot;text-align: justify&quot;&gt;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
&lt;/div&gt;&#039;,
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-Outlook





Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.





&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;





This rather depressing assessment of the field is the opening sentence...&#039;
$disp = &#039;&lt;div style=&quot;text-align: justify&quot;&gt;-Outlook&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&amp;quot;Economics is haunted by more fallacies than any other study known to man.&amp;quot;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;This rather depressing assessment of the field is the opening sentence of Henry Hazlitt&#039;s classic primer, Economics in one lesson. In Hazlitt&#039;s view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it&#039;s time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &amp;quot;good economist&#039;s&amp;quot; view &amp;mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;For supporters, the scheme is a vital social safety net for rural Indians; for critics it&#039;s an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &amp;mdash; rural education and Naxalite conflict.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;First education. For poor families, the decision to invest in their children&#039;s education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There&#039;s also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there&#039;s a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;The reality for India is somewhere in between. The challenge is finding that point.&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;em&gt;Papers referenced in this article:&lt;/em&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://scholar.harvard.edu/files/steinberg/files/paper.pdf&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;&lt;br /&gt;&lt;/div&gt;&lt;div style=&quot;text-align: justify&quot;&gt;http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803&lt;/div&gt;&#039;
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Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.





&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;





This rather depressing assessment of the field is the opening sentence..."/>
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                <strong>Unintended Consequences Of NREGS -Shailesh Chitnis</strong></h1>
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                <div style="text-align: justify">-Outlook</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</div><div style="text-align: justify">First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The reality for India is somewhere in between. The challenge is finding that point.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Papers referenced in this article:</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://scholar.harvard.edu/files/steinberg/files/paper.pdf</div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803</div>               </font>
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		'description' => '<div style="text-align: justify">
-Outlook
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
<em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em>
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.
</div>
<div style="text-align: justify">
First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The reality for India is somewhere in between. The challenge is finding that point.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
<em>Papers referenced in this article:</em>
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.





&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;





This rather depressing assessment of the field is the opening sentence...',
	'disp' => '<div style="text-align: justify">-Outlook</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</div><div style="text-align: justify">First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The reality for India is somewhere in between. The challenge is finding that point.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Papers referenced in this article:</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://scholar.harvard.edu/files/steinberg/files/paper.pdf</div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803</div>',
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	'title' => 'Unintended Consequences Of NREGS -Shailesh Chitnis',
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	'description' => '<div style="text-align: justify">
-Outlook
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
<em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em>
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.
</div>
<div style="text-align: justify">
First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
The reality for India is somewhere in between. The challenge is finding that point.
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
<em>Papers referenced in this article:</em>
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
http://scholar.harvard.edu/files/steinberg/files/paper.pdf
</div>
<div style="text-align: justify">
<br />
</div>
<div style="text-align: justify">
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803
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-Outlook





Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.





&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;





This rather depressing assessment of the field is the opening sentence...'
$disp = '<div style="text-align: justify">-Outlook</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">&quot;Economics is haunted by more fallacies than any other study known to man.&quot;&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a &quot;good economist's&quot; view &mdash; the effect of NREGS on Indian society as a whole, not just the beneficiaries.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact &mdash; rural education and Naxalite conflict.</div><div style="text-align: justify">First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The reality for India is somewhere in between. The challenge is finding that point.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Papers referenced in this article:</em></div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://scholar.harvard.edu/files/steinberg/files/paper.pdf</div><div style="text-align: justify"><br /></div><div style="text-align: justify">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803</div>'
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Unintended Consequences Of NREGS -Shailesh Chitnis

-Outlook Recent studies point to two areas where NREGS has had an impact — rural education and Naxalite conflict. "Economics is haunted by more fallacies than any other study known to man."  This rather depressing assessment of the field is the opening sentence of Henry Hazlitt's classic primer, Economics in one lesson. In Hazlitt's view, most economists only measure the immediate impact of their policies. A good economist, Hazlitt contended, looks not merely at the immediate but at the longer effects of any policy, tracing the consequences of that policy not just for one group but for all groups. I bring up Hazlitt because it has been ten years since the National Rural Employment Guarantee Scheme (NREGS) was launched and it's time to take stock of its impact. The scheme guarantees up to 100 days of annual employment along with a minimum wage rate to rural households. It also mandates equality of wages for men and women. At a cost of over $8 billion every year and reaching over 50 million households, NREGS is the largest social welfare program in the world. Evaluating the full impact of this program requires a "good economist's" view — the effect of NREGS on Indian society as a whole, not just the beneficiaries.  For supporters, the scheme is a vital social safety net for rural Indians; for critics it's an expensive example of an inefficient and bloated welfare state. There is evidence which shows that NREGS has increased rural wages by about 5 percent and improved consumption spending in rural areas. However the results are patchy; there are marked variations across states in implementation, depending on political and administrative support. But such large scale intervention by the government also has spillover effects in the social fabric. Recent studies point to two areas where NREGS has had an impact — rural education and Naxalite conflict. First education. For poor families, the decision to invest in their children's education depends on income trade-off. A paper by Manisha Shaha and Bryce Sternberg1 measures the effect of NREGS on rural enrolment. The authors find that in villages exposed to NREGS, high school children score lower on math and are less likely to be enrolled in school. There's also a split by gender, with boys more likely to be engaged in market work. Girls report an increase in domestic work, since their mothers are eligible for work under NREGS. The authors estimate that in its first four years, NREGS caused between 650,000 and 2 million children to drop out of school. The study points to the unintended consequences of such programmes where incentives drive actions that cannot be predicted at the outset. Despite this, it is hard to dismiss the programme as detrimental to rural progress, because the loss of human capital has to be weighed against other welfare outcomes. A case in point, is the effect of the programme on local violence. There are a few studies now that point to the positive effect of NREGS in reducing local conflict. For instance, research by Aditya Dasgupta and his colleagues shows that NREGS caused almost 50 percent reduction in violent incidences and deaths. This effect was even more pronounced in regions that experienced poor agriculture output due to low rainfall, indicating that NREGS reduced violence by actually improving livelihoods. While inherently a complex subject, the Maoist insurgency thrives in areas of extreme poverty, with very little government action. By providing rural households with a safety net, NREGS helps the administration win local support. But there's a catch. The positive spillovers from NREGS depend on proper implementation. The above results only hold in districts where the programme was properly run. If implementation suffers, it could create distrust in government programs and give a fillip to insurgents. The difficulty in assessing the success or failure of NREGS highlights how frustratingly complex India can be for economists with strong ideological bent. Given the huge gaps in the system, any government intervention has impact beyond its intended audience. Left leaning Keynesians cannot in good conscience push for large social programs when the implementation is weak and corruption is endemic. Free marketers cannot simply mouth drip-down economics in a country where over half the population lives in extreme poverty.  The reality for India is somewhere in between. The challenge is finding that point. Papers referenced in this article: http://scholar.harvard.edu/files/steinberg/files/paper.pdf http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495803