IDEAS home Printed from https://ideas.repec.org/p/alo/isipdp/07-05.html
   My bibliography  Save this paper

How does poverty decline? Evidence from India, 1983-1999

Author

Listed:
  • Mukesh Eswaran

    (University of British Columbia)

  • Ashok Kotwal

    (University of British Columbia)

  • Bharat Ramaswami

    (Indian Statistical Institute, New Delhi)

  • Wilima Wadhwa

    (University of California)

Abstract

This paper attempts to assess the relative contributions of the farm and non-farm sectors to the increase in agricultural wage earnings in India between 1983-1999. Cross-section analysis of NSS data for 1983 and 1993 confirm the importance of farm productivity growth, consistent with the predictions of our theoretical model. A counterfactual exercise that attempts to estimate the relative contribution of the non-farm sector to the increase in the agricultural wage earnings during the period 1983-1999 suggests that this figure is no more than 25 at the all-India level, though it is higher in some states. Thus the bulk of the growth in wage earnings and the attendant decline in poverty during this period appears to be due to the farm sector.

Suggested Citation

  • Mukesh Eswaran & Ashok Kotwal & Bharat Ramaswami & Wilima Wadhwa, 2007. "How does poverty decline? Evidence from India, 1983-1999," Discussion Papers 07-05, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:07-05
    as

    Download full text from publisher

    File URL: http://www.isid.ac.in/~pu/dispapers/dp07-05.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June.
    2. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    3. Timothy Besley & Robin Burgess, 2002. "The Political Economy of Government Responsiveness: Theory and Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1415-1451.
    4. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    5. B.N.Goldar, 2004. "Productivity trends in Indian manufacturing in the pre- and post- reform periods," Indian Council for Research on International Economic Relations, New Delhi Working Papers 137, Indian Council for Research on International Economic Relations, New Delhi, India.
    6. repec:hoo:wpaper:e-92-3 is not listed on IDEAS
    7. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    8. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," The World Bank Economic Review, World Bank, vol. 10(1), pages 1-25, January.
    9. Foster, Andrew D & Rosenzweig, Mark R, 2004. "Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 509-542, April.
    10. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    11. Praduman kumar & Anjani kumar & Surabhi Mittal, 2004. "Total Factor Productivity of Crop Sector in the Indo-Gangetic Plain of India: Sustainability issues revisited," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 39(1), pages 169-201, January.
    12. Eswaran, Mukesh & Kotwal, Ashok, 1993. "A theory of real wage growth in LDCs," Journal of Development Economics, Elsevier, vol. 42(2), pages 243-269, December.
    13. Angus Deaton & Valerie Kozel, 2005. "Data and Dogma: The Great Indian Poverty Debate," The World Bank Research Observer, World Bank, vol. 20(2), pages 177-199.
    14. Richard Palmer-Jones & Kunal Sen, 2003. "What has luck got to do with it? A regional analysis of poverty and agricultural growth in rural India," Journal of Development Studies, Taylor & Francis Journals, vol. 40(1), pages 1-31.
    15. Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2015. "Preferences, Spatial Prices and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 51(11), pages 1488-1501, November.
    2. Hanan G. Jacoby, 2016. "Food Prices, Wages, And Welfare In Rural India," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 159-176, January.
    3. Peter Lanjouw & Rinku Murgai, 2009. "Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 243-263, March.
    4. Eshita Gupta & Bharat Ramaswami & E. Somanathan, 2021. "The Distributional Impact of Climate Change: Why Food Prices Matter," Economics of Disasters and Climate Change, Springer, vol. 5(2), pages 249-275, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J.Salcedo Cain & Rana Hasan & Devashish Mitra, 2010. "Trade Liberalization and Poverty Reduction: New Evidence from Indian States," Working Papers 3333, School of International and Public Affairs, Columbia University, revised Nov 2010.
    2. Nobuhiko Fuwa & Arsenio M. Balisacan & Fabrizio Bresciani, 2015. "In Search of a Strategy for Making Growth More Pro-Poor in the Philippines," Asian Economic Papers, MIT Press, vol. 14(1), pages 202-226, Winter/Sp.
    3. Tarlok Singh, 2022. "Economic growth and the state of poverty in India: sectoral and provincial perspectives," Economic Change and Restructuring, Springer, vol. 55(3), pages 1251-1302, August.
    4. Ashok Kotwal & Bharat Ramaswami & Wilima Wadhwa, 2011. "Economic Liberalization and Indian Economic Growth: What's the Evidence?," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1152-1199, December.
    5. Massimiliano Calì & Carlo Menon, 2013. "Does Urbanization Affect Rural Poverty? Evidence from Indian Districts," The World Bank Economic Review, World Bank, vol. 27(2), pages 171-201.
    6. Bhalotra, Sonia, 2010. "Fatal fluctuations? Cyclicality in infant mortality in India," Journal of Development Economics, Elsevier, vol. 93(1), pages 7-19, September.
    7. Gupta, Poonam & Hasan, Rana & Kumar, Utsav, 2009. "Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing," MPRA Paper 13496, University Library of Munich, Germany.
    8. Beck, T.H.L. & Hoseini, M., 2014. "Informality and Access to Finance : Evidence from India," Other publications TiSEM 00e890f4-bd1a-46ba-9064-7, Tilburg University, School of Economics and Management.
    9. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.
    10. Ayyagari, Meghana & Beck, Thorsten & Hoseini, Mohammad, 2020. "Finance, law and poverty: Evidence from India," Journal of Corporate Finance, Elsevier, vol. 60(C).
    11. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    12. Headey, Derek & Bezemer, Dirk & Hazell, Peter B., 2008. "Agricultural exit problems: Causes and consequences," IFPRI discussion papers 802, International Food Policy Research Institute (IFPRI).
    13. Jonathan R. W. Temple, 2005. "Growth and Wage Inequality in a Dual Economy," Bulletin of Economic Research, Wiley Blackwell, vol. 57(2), pages 145-169, April.
    14. Rohini Pande & Christopher Udry, 2005. "Institutions and Development:A View from Below," Working Papers 928, Economic Growth Center, Yale University.
    15. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    16. Kathuria, Vinish & Rajesh Raj, S.N. & Sen, Kunal, 2013. "The effects of economic reforms on manufacturing dualism: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1240-1262.
    17. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    18. repec:esx:essedp:729 is not listed on IDEAS
    19. Beck, Thorsten & Ayyagari, Meghana, 2013. "Finance and Poverty: Evidence from India," CEPR Discussion Papers 9497, C.E.P.R. Discussion Papers.
    20. Rui Benfica & Heath Henderson, 2021. "The Effect of the Sectoral Composition of Economic Growth on Rural and Urban Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 248-284, March.
    21. Stefan Dercon & Douglas Gollin, 2014. "Agriculture in African Development: A Review of Theories and Strategies," CSAE Working Paper Series 2014-22, Centre for the Study of African Economies, University of Oxford.

    More about this item

    Keywords

    Farm and non-farm productivity growth; non-farm employment; poverty; wage earnings;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:alo:isipdp:07-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Debasis Mishra (email available below). General contact details of provider: https://edirc.repec.org/data/isindin.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.