Is There Surplus Labor in Rural India?
AbstractWe show empirically using panel data at the plot and farm level and based on a model incorporating supervision costs, risk, credit-market imperfections and scale-economies associated with mechanization that small-scale farming is inefficient in India. Larger farms are more profitable per acre, more mechanized, less constrained in input use after bad shocks, and employ less per-acre labor than small farms. Based on our structural estimates of the effects of farm size on labor use and the distribution of Indian landholdings, we estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres.
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Bibliographic InfoPaper provided by Economic Growth Center, Yale University in its series Working Papers with number 991.
Length: 48 pages
Date of creation: Oct 2010
Date of revision:
agriculture; India; scale; profits; labor; tractors;
Other versions of this item:
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-10-30 (Agricultural Economics)
- NEP-ALL-2010-10-30 (All new papers)
- NEP-DEV-2010-10-30 (Development)
- NEP-LAB-2010-10-30 (Labour Economics)
- NEP-LTV-2010-10-30 (Unemployment, Inequality & Poverty)
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