Examining the Macro Effects of MNREGA

While numerous micro-founded studies examine the household-level effects of MNREGA, little is known about its aggregate macro effects and long-term benefits to output, if any. Analysing district-level data from 2000-2013, this article shows that introduction of MNREGA led to an increase in measures of economic activity: 3% increase in night-time lights, and a 13% increase in banking deposits. However, the positive effects are mostly driven by the richer districts, which is indicative of potential implications for inequality.