ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Did MGNREGS Improve Financial Inclusion?

Utilising household-level data, this paper investigates the impact of Mahatma Gandhi National Rural Employment Guarantee Scheme on financial inclusion. Exploiting the staggered timing of the roll-out of the programme across districts, while controlling for its non-random implementation, it is found that MGNREGS improves financial access. This is confirmed in simple univariate tests as well as in multivariate regressions that take into account several district- and household-level controls. The evidence, however, is less compelling when the use of finance is examined, although there is a differential impact for districts with higher proportion of women. The magnitudes in most cases are quite large and suggest that public works programme can positively influence financial inclusion.
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