An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions

Uninsured risk constrains households in their production decisions in many developing countries. Similarly to crop insurance, employment guarantees can support farmers in managing agricultural production risks. Evidence from representative panel da...

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Main Author:	Gehrke, Esther
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	INSURANCE AGRICULTURAL RISK EMPLOYMENT GUARANTEE UNCERTAINTY WEATHER CROP FAILURE CROP CHOICE LABOR MARKET DIVERSIFICATION
Online Access:	http://documents.worldbank.org/curated/en/389031490723477182/An-employment-guarantee-as-risk-insurance-assessing-the-effects-of-the-NREGS-on-agricultural-production-decisions http://hdl.handle.net/10986/26354

id	okr-10986-26354
recordtype	oai_dc
spelling	okr-10986-263542021-06-08T14:42:48Z An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions Gehrke, Esther INSURANCE AGRICULTURAL RISK EMPLOYMENT GUARANTEE UNCERTAINTY WEATHER CROP FAILURE CROP CHOICE LABOR MARKET DIVERSIFICATION Uninsured risk constrains households in their production decisions in many developing countries. Similarly to crop insurance, employment guarantees can support farmers in managing agricultural production risks. Evidence from representative panel data of Andhra Pradesh, India, suggests that the National Rural Employment Guarantee Scheme (NREGS) reduces households' uncertainty about future income streams because it provides employment opportunities in rural areas independently of weather shocks and crop failure. Because the NREGS makes an ex-post labor supply response to agricultural shocks more efficient, households with access to the NREGS can shift their production towards riskier but also more profitable crops. The observed shifts in agricultural production do considerably raise the profitability of agricultural production and hence the incomes of smallholder farmers. The findings are not driven by changes in the labor or cost intensity of those crops, which supports the idea that the causal mechanism underlying the observed changes is indeed an insurance effect. 2017-04-13T17:09:12Z 2017-04-13T17:09:12Z 2017-03 Working Paper http://documents.worldbank.org/curated/en/389031490723477182/An-employment-guarantee-as-risk-insurance-assessing-the-effects-of-the-NREGS-on-agricultural-production-decisions http://hdl.handle.net/10986/26354 English en_US Policy Research Working Paper;No. 8015 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	INSURANCE AGRICULTURAL RISK EMPLOYMENT GUARANTEE UNCERTAINTY WEATHER CROP FAILURE CROP CHOICE LABOR MARKET DIVERSIFICATION
spellingShingle	INSURANCE AGRICULTURAL RISK EMPLOYMENT GUARANTEE UNCERTAINTY WEATHER CROP FAILURE CROP CHOICE LABOR MARKET DIVERSIFICATION Gehrke, Esther An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
geographic_facet	South Asia India
relation	Policy Research Working Paper;No. 8015
description	Uninsured risk constrains households in their production decisions in many developing countries. Similarly to crop insurance, employment guarantees can support farmers in managing agricultural production risks. Evidence from representative panel data of Andhra Pradesh, India, suggests that the National Rural Employment Guarantee Scheme (NREGS) reduces households' uncertainty about future income streams because it provides employment opportunities in rural areas independently of weather shocks and crop failure. Because the NREGS makes an ex-post labor supply response to agricultural shocks more efficient, households with access to the NREGS can shift their production towards riskier but also more profitable crops. The observed shifts in agricultural production do considerably raise the profitability of agricultural production and hence the incomes of smallholder farmers. The findings are not driven by changes in the labor or cost intensity of those crops, which supports the idea that the causal mechanism underlying the observed changes is indeed an insurance effect.
format	Working Paper
author	Gehrke, Esther
author_facet	Gehrke, Esther
author_sort	Gehrke, Esther
title	An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
title_short	An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
title_full	An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
title_fullStr	An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
title_full_unstemmed	An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions
title_sort	employment guarantee as risk insurance? : assessing the effects of the nregs on agricultural production decisions
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/389031490723477182/An-employment-guarantee-as-risk-insurance-assessing-the-effects-of-the-NREGS-on-agricultural-production-decisions http://hdl.handle.net/10986/26354
_version_	1764461774485061632

An Employment Guarantee as Risk Insurance? : Assessing the Effects of the NREGS on Agricultural Production Decisions

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