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Title:Food security in India
Author(s):Shrinivas, Aditya
Director of Research:Crost, Ben
Doctoral Committee Chair(s):Baylis, Kathy; Crost, Ben
Doctoral Committee Member(s):Mallory, Mindy; Michelson, Hope; Pingali, Prabhu
Department / Program:Agr & Consumer Economics
Discipline:Agricultural & Applied Econ
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Food security, Labor Markets, Social Safety Nets, Welfare programs, Public Distribution System, Nutrition, Household Consumption, Labor supply elasticity, Consumption smoothing, Risk, Insurance, village economies
Abstract:This thesis examines the role of social safety nets in providing food security and income stability in developing economies. The first two chapters study the effectiveness of one of the world's largest safety net program - India's Public Distribution System (PDS). The first chapter examines the impact of the program on the labor market. The second analyzes the effect of the program on food security. The third chapter asks whether households fully smooth consumption in the face of fluctuations in income. In the first chapter (co-authored with Kathy Baylis and Ben Crost), we examine the effect of the PDS program on labor supply and wages. Our empirical analysis exploits changes in the generosity of this in-kind transfer brought about by India's National Food Security Act in 2013. Using detailed data on transfer eligibility, labor supply and wages, we find that larger transfers led to lower labor supply and higher wages, and that these effects particularly benefited the poor. The wage increases from the recent expansion account for 30% of the total welfare gains for the poorest quintile. Further, the effect on labor supply and wages is particularly strong in years with bad productivity shocks. Our results suggest that social transfers can have an additional poverty-reducing effect through the wage channel, and can play an important role in preventing the vicious cycle of low wages and high labor supply that afflicts poor households in bad years. In the second chapter (co-authored with Kathy Baylis, Ben Crost and Prabhu Pingali), we examine the effect of the PDS program on household consumption and nutrition. We find that increased PDS subsidies, that resulted from the National Food Security Act in 2013, improved nutrition and "crowded- in" the consumption of nutritious non-staple foods along with increasing calories. Further, the subsidy supported food consumption as opposed to flowing to other goods. PDS beneficiaries consumed 84% of the transfer value in the form of food, suggesting that the subsidy did not cause them to substantially reduce their consumption of non-subsidized food. The effect of PDS subsidies on food consumption is highest in households where women have more control over the food budget, suggesting a role of intra-household bargaining. Overall, our results suggest that in-kind staple food subsidies can lead to large improvements in nutritional outcomes of poor households. In the third chapter, I study whether informal risk-sharing can provide full consumption insurance in village economies. I propose a new test for full risk sharing that accounts for heterogeneity in risk and time preferences, and apply this method to Indian village data. While there is substantial and significant heterogeneity in estimated risk and time preferences, full risk sharing is rejected for both cases - with and without heterogeneity. Estimated risk and time preferences are associated with wealth and household characteristics, suggesting an incomplete separation between consumption and production, a characteristic of incomplete markets.
Issue Date:2019-07-11
Rights Information:Copyright 2019 Aditya Shrinivas
Date Available in IDEALS:2019-11-26
Date Deposited:2019-08

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