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Does risk matter? The case of wage-labour allocation by owner-cultivators

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  • Sunil Kanwar

Abstract

This study analyses the impact of revenue risk on the hiring-out behaviour of owner-cultivators. Since hiring-out is not certain, labour market risk is also allowed for. A large sample of owner-cultivators residing in semi-arid regions in India, and hence subject to high production and labour market risks, is used for this purpose. It is found that, possibly because production risks carry forward into the local labour market, households are unable to use the labour market as a hedge against production risk. We also find that labour force participation is positively affected by increases in the real wage rate, a result that is contrary to the findings of earlier studies using data from less developed agriculture. Several other insights also result.

Suggested Citation

  • Sunil Kanwar, 1999. "Does risk matter? The case of wage-labour allocation by owner-cultivators," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 307-317.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:3:p:307-317
    DOI: 10.1080/000368499324291
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    References listed on IDEAS

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    1. Parliament, Claudia A., 1984. "Agricultural Production Cooperatives: Factors Affecting Performance," Faculty and Alumni Dissertations 206054, University of Minnesota, Department of Applied Economics.
    2. Sunil Kanwar, 1998. "Are production risk and labour market risk covariant?," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(1), pages 129-146.
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    Cited by:

    1. Sunil Kanwar, 2000. "Seasonality and Wage-responsiveness in nonclearing labour markets: Evidence from Indian agriculture," Working papers 80, Centre for Development Economics, Delhi School of Economics.

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