Did the nation-wide implementation of e-FMS in MGNREGS result in reduced expenditures? A re-examination of the evidence. A new GLO Discussion Paper of GLO Fellow Deepti Goel and colleagues.

A new GLO Discussion Paper questions the substantial 19 percent reduction in labor expenditures of the reform in India’s national workfare program found in recent literature on methodological grounds.

Deepti Goel

GLO Discussion Paper No. 1146, 2022

Did the nation-wide implementation of e-FMS in MGNREGS result in reduced expenditures? A re-examination of the evidence  Download PDF
by Goel, Deepti & Meenakshi, J. V. & De Souza, Zaeen

GLO Fellow Deepti Goel

Author Abstract: This paper revisits a part of the analysis by Banerjee et al. (2020), in which they examine the consequences of the nation-wide scale up of reforms to the funds management system (e-FMS) in India’s national workfare programme, using a two-way fixed effects specification. They report a substantial 19 percent reduction in labour expenditures. We exploit the recent literature that highlights the limitations of the TWFE estimator in the presence of staggered roll out and effect a Goodman-Bacon decomposition of the TWFE coefficient, to pinpoint sources of identifying variation. We undertake a detailed examination of subsamples of six constituent and valid DiDs based on timing of treatment that are averaged into the TWFE coefficient to identify heterogeneity in treatment effects. This disaggregated subsample analysis does not support the conclusion of any reductions in MGNREGS labour expenditures, suggesting that the TWFE coefficient based on the full sample is indeed biased.

Vol. 35, Issue 4, October 2022: Journal of Population Economics (JOPE): 15 articles
Just released: CiteScore of JOPE moves up from 3.9 (2020) to 6.5 (2021)! LINK
Similar, its Impact Factor is now 4.7 (2021) after 2.8 (2020)! LINK

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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