Can the Major Public Works Policy Buffer Negative Shocks in Early Childhood? Evidence from Andhra Pradesh, India

The study examines the role of the largest public works program in the world-the National Rural Employment Guarantee Scheme (NREGS) in buffering the negative effects of early childhood exposure to rainfall shocks on long-term health outcomes. Exploiting the spatial and temporal variation in NREGS coverage, the study estimates the extent to which nutritional insults in early childhood can be offset in the presence of the policy. The study employs a unique identification strategy by integrating detailed administrative records of drought shock and phase-wise roll-out information of NREGS with a household level panel data-the Young Lives surveyconducted over three waves (2002, 2006-07 and 2009-10) in the state of Andhra Pradesh, India. Using child fixed effects estimation the study finds that while the policy does not help correct long term past health deficiencies it is useful in buffering recent drought shocks, which varies by policy relevant sub-groups. JEL Classification: I18, J13, O22