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Casual and regular contracts: Workers' self-selection in the rural labour markets in India


  • Sarmistha Pal


The article examines workers' choice between casual and regular contracts. It departs from existing theories in that in addition to wage considerations it highlights the significance of time and credit constraints. Results obtained from the ICRISAT villages in India suggest that risk-averse landless labourers ought to prefer casual to regular contracts because earnings from casual contracts are higher. However, this argument gets strongly modified once we consider that a large part of regular wages are received in advance and that the comparative attractiveness of regular contracts depends crucially on whether labourers have access to credit and other jobs.

Suggested Citation

  • Sarmistha Pal, 1996. "Casual and regular contracts: Workers' self-selection in the rural labour markets in India," Journal of Development Studies, Taylor & Francis Journals, vol. 33(1), pages 99-116.
  • Handle: RePEc:taf:jdevst:v:33:y:1996:i:1:p:99-116
    DOI: 10.1080/00220389608422455

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