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Rural wages in India: Recent trends and determinants

Author

Listed:
  • Himanshu

    (Jawaharlal Nehru University)

  • Sujata Kundu

    (Reserve Bank of India)

Abstract

This paper looks into the overall trends in rural wages from 1983 to 2011–12, and attempts to analyse the factors that led to the unprecedented rise in rural wages (particularly since 2007–08) which attracted much policy debate. Did growth in agricultural productivity lead to the unprecedented rise in rural wages? Or was the uptrend determined by factors outside the agricultural sector, most importantly the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) since 2006–07, and the overall economic growth with the resultant structural changes in the labour market? Using panel data regression, the paper finds that the MGNREGA was not the sole factor responsible for this uptrend, as has been claimed by several researchers. Factors such as agricultural productivity, construction sector growth, urbanisation, and literacy also majorly contributed to the rise in rural wages.

Suggested Citation

  • Himanshu & Sujata Kundu, 2016. "Rural wages in India: Recent trends and determinants," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(2), pages 217-244, June.
    • Handle: RePEc:spr:ijlaec:v:59:y:2016:i:2:d:10.1007_s41027-017-0052-9
    DOI: 10.1007/s41027-017-0052-9
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    References listed on IDEAS

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    Cited by:

    1. Himanshu, 2017. "Growth, structural change and wages in India: recent trends," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(3), pages 309-331, September.
    2. Das, Arindam & Usami, Yoshifumi, 2017. "Wage Rates in Rural India, 1998–99 to 2016–17," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 7(2), December.
    3. SJ, Balaji & Pal, Suresh, 2021. "Agricultural Productivity, Pay-Gap, and Non-Farm Development: Contribution to Structural Transformation in India," 2021 Conference, August 17-31, 2021, Virtual 315213, International Association of Agricultural Economists.
    4. Sandeep Kandikuppa & Clark Gray, 2022. "Climate change and household debt in rural India," Climatic Change, Springer, vol. 173(3), pages 1-27, August.
    5. Pawde, Balu & Shaw, Tara Shankar & Trivedi, Pushpa L, 2022. "Household Consumption Expenditure Inequality in Rural India: 1993-94 to 2011-12," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 57(11).

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    More about this item

    Keywords

    Rural Wages; MGNREGA; Agricultural productivity; Rural labour; Real wages;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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