Using a novel data-set of district-wise program expenditure, we estimate the impact of large employment schemes on agricultural wages in India. Depending on the underlying theoretical mechanism, private wages can either respond to contemporaneous fluctuations in program expenditure or be...

This paper presents a model of the labor market where public workfares increase private wages by reducing labor supply. In a dynamic setting, we show that when wages are downwardly rigid, forward-looking employers optimally compress wage increases in response to intertemporal variability in the...