Special economic zones and livelihood changes: Evidence from India

Abstract

This study examines livelihood changes of households affected by special economic zone-led displacement using a novel data set comprising households displaced due to the setting up of the Falta Special Economic Zone (FSEZ) in India and households indirectly affected by FSEZ. The results indicate lower labour market participation among members of affected households. The results also suggest lower returns to education for displaced households working within FSEZ, particularly women. However, once pre-FSEZ characteristics are controlled to address endogeneity, the outcomes for displaced households become similar to that of non-displaced households.