Social insurance and conflict: Evidence from India

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Can public interventions persistently reduce conflict? This paper studies whether social insurance is effective in reducing conflict. Adverse income shocks have been empirically and theoretically identified as robust drivers of conflict. An effective social insurance system moderates the impact of adverse shocks on household incomes, and hence, could attenuate the link between these shocks and conflict. This paper shows that a public employment program in India provides social insurance. The program guarantees 100 days of employment at minimum wages providing an alternative source of income following bad harvests. This has an indirect pacifying effect. By moderating the link between productivity shocks and incomes, the program uncouples productivity shocks and conflict.