Rural labour markets in india

45
Rural Labour Markets in India A Amarender Reddy ICRISAT [email protected] [email protected]

description

The presentation illustrates the changes in rural labour markets since early 1970s in India.

Transcript of Rural labour markets in india

Page 1: Rural labour markets in india

Rural Labour Markets in

India

A Amarender Reddy

ICRISAT

[email protected]

[email protected]

Page 2: Rural labour markets in india

Outline of the presentation

Objectives of the study

Key findings of the project on rural labour

dynamics at ICRISAT

Synthesis of three paper

From longitudinal data from 1975 to 2012

In depth study for the year 2010

Trends in rural wage rates across states from

1995 to 2011

Conclusions and Policy prescriptions

Page 3: Rural labour markets in india

Objectives and Methods

The study used the data of Village Dynamic Studies in

South Asia(VDSA),and National Sample Survey

Organisation (NSSO) and also wage data of labour

buero

The spatial and temporal structural changes in the

labour force and employment structure in India and

Bangladesh.

Trends in Real wage rates

Factors determining the labour productivity (Modified

Mincer Equation) and workers occupational choice

(Multinomial Logit Model) will be assessed.

Page 4: Rural labour markets in india

Future labour markets Structural transformation in GDP is faster, but labour

markets are slow

Until early 1980s agriculture is the driving force

From 1990s non-farm sector is driving growth

Increasing real wage rates even in rural areas

Higher productivity/wage differentials: rural-urban, farm- nonfarm; men-women declining

Growing income inequality- high social costs

Education and other institutions are increasing intergenerational inequality?

Bottom 20-30% of rural population is critical, mostly agricultural labourer

Increasing productivity in farm sector

Liberalisation policies for RNF/informal sector

Framers, agricultural labourer interest groups

Page 5: Rural labour markets in india

Driving forces in rural labour markets

Skill skill

productivity

Page 6: Rural labour markets in india

0

1

2

3

4

5

6

7

0

10

20

30

40

50

60

70

80

1973 1977 1983 1988 1993 1999 2004 2009 2012

Lab

our

pro

duct

ivity(

non-a

gril/

agri

l)

Shar

e o

f la

bour(

%)

Macro Trends in GDP and labour productivity

share of non-agricultural labour

share of agril. Labour

Labour productivity gap between agril and non-agril

Page 7: Rural labour markets in india

86 86

71 58

14 14

29 42

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1975 1984 2004 2010

% o

f to

tal m

ale w

ork

ers

Farm and non-farm employment (%)

in VDSA villages

farm non-farm

Page 8: Rural labour markets in india
Page 9: Rural labour markets in india
Page 10: Rural labour markets in india

Cultivators in 1975

Shift to agriculture sector Shift to non-agriculture

Year Cultivators Livestock

Agricultural

Labourer

Attached

labourer

Non-

farm

labour

Caste

occupatio

n Business Salaried Others Total

1975 100 100

1984 77 6 5 2 1 2 0 5 1 100

2004 59 3 10 3 1 1 5 17 3 100

2010 44 6 9 1 8 2 11 15 4 100

Casual labourer in agriculture in 1975

Shift to agriculture sector Shift to non-agriculture

Cultivators Livestock

Agricultural

Labourer

Attached

labourer

Non-

farm

labour

Caste

occupatio

n Business Salaried Others Total

1975 0 0 100 0 0 0 0 0 0 100

1984 13 5 70 6 3 3 1 0 0 100

2004 46 8 20 2 4 0 4 12 4 100

2010 32 16 18 4 14 0 7 9 2 100

Occupational Mobility Matrix (% of male workers) for whose occupation is cultivation and agricultural labourer in 1975 (males)

Page 11: Rural labour markets in india

Year 1975 Year 2010

Occupational structure OBC ST SC Others Total OBC ST SC Others Total

Males

Agriculture (I) 92 94 90 88 91 76 69 53 85 74

Cultivation 45 47 19 59 44 48 47 16 56 47

Livestock 14 18 7 16 14 6 9 5 5 7

Agricultural labourer 33 29 64 13 33 22 13 32 24 20

Non-agriculture (II) 8 6 10 12 9 24 31 47 15 26

Non-agricultural labourer 0 0 1 1 0 17 12 37 15 16

Salaried 2 5 5 6 3 6 3 11 0 4

Business 1 1 2 3 2 1 1 0 0 1

Others 4 0 2 2 3 1 15 0 0 6

Total (III) 100 100 100 100 100 100 100 100 100 100

Females

Agriculture (I) 100 84 100 100 93 76 72 75 71 74

Cultivation 49 38 0 8 35 47 48 24 55 46

Livestock 9 0 0 0 3 2 4 3 3 3

Agricultural labourer 42 46 100 92 55 27 20 48 13 25

Non-agriculture (II) 0 16 0 0 7 24 28 25 29 26

Non-agricultural labourer 0 0 0 0 0 1 1 2 0 1

Salaried 0 0 0 0 0 8 16 12 15 11

Business 0 4 0 0 2 4 4 1 9 5

Others 0 12 0 0 5 11 6 10 5 9

Total (III) 100 100 100 100 100 100 100 100 100 100

Notes: OBC: Other Backward Caste; SC: Scheduled Caste; ST: Scheduled Tribes

Major occupation of workers (% of total workers) by Social status

Page 12: Rural labour markets in india

Major

Occupation Agricultur

al labor

Attached

laborer Cultivation

Domestic

work

Livestock

rearing

Nonfarm

laborer

Other

traditional Others All

Forward

1975 0 0 100 0 0 0 0 0 100

1984 0 0 100 0 0 0 0 0 100

1989 8 0 84 0 0 0 8 0 100

2010 4 0 83 0 0 0 0 13 100

OBC

1975 22 3 44 6 6 0 19 0 100

1984 19 3 46 5 3 0 24 0 100

1989 17 2 62 2 9 2 6 0 100

2010 41 0 45 0 2 2 7 3 100

SC

1975 46 31 23 0 0 0 0 0 100

1984 54 31 15 0 0 0 0 0 100

1989 29 14 57 0 0 0 0 0 100

2010 72 0 13 0 0 15 0 0 100

Major occupation of workers by Social status (two villages of AP)

Page 13: Rural labour markets in india

Major occupation of workers

(Male in %) by education

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Illit

era

te

read

and w

rite

upto

pri

mar

y

upto

mid

dle

hig

h s

chool

dip

lom

a

grad

uat

e

All

pri

mar

y

mid

dle

hig

h s

chool

inte

r

dip

lom

a

grad

uat

ion

post

gra

duat

ion

Tota

l

1975 2010

all others

RFS

Farm labour

Farming

Page 14: Rural labour markets in india

Female work structure by education level

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Illit

era

te

read

and w

rite

upto

pri

mar

y

upto

mid

dle

hig

h s

chool

grad

uat

e

All

illitera

te

pri

mar

y

mid

dle

hig

h s

chool

inte

r

dip

lom

a

grad

uat

ion

post

gra

duat

ion

Tota

l

1975 2010

Others

Farming

Farm labor

Page 15: Rural labour markets in india

0

50

100

150

200

250

300

illiterate primary middle high

school

10+2 degree

and above

Illiterate Primary Middle High

school

10+2 degree

and above

Female Male

Work days (days/year) in 2010

Who is getting how many days of employment

Page 16: Rural labour markets in india

Major occupation of workers (%)

by Social status (1975-2010)

0

5

10

15

20

25

30

35

40

45

1975 2010 1975 2010 1975 2010

farming agricultural

labourer

salaried job

Males

BC ST/SC Others

0

5

10

15

20

25

30

35

40

1975 2010 1975 2010 1975 2010

farming agricultural

labourer

salaried job

Female

BC ST/SC Others

Page 17: Rural labour markets in india

Credit delivery still land is major

collateral?

0

10

20

30

40

50

60

70

80

Formal

sources

Informal

sources

Formal

sources

Informal

sources

Borrowers (%) Multiple borrowers

(%)

Social group

Others OBC ST SC

0

10

20

30

40

50

60

70

80

Formal

sources

Informal

sources

Formal

sources

Informal

sources

Borrowers (%) Multiple borrowers

(%)

Land class

landless small

medium large

Page 18: Rural labour markets in india

Work days excluding domestic work

0

50

100

150

200

250

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

2006

2008

2009

2010

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

2006

2008

2009

2010

female male

Standard work days per year

paid days Days in Economic Activity (including own farm)

Page 19: Rural labour markets in india

Work days including domestic work

0

50

100

150

200

250

300

1975

1977

1979

1981

1983

2006

2009

1976

1978

1980

1982

1984

2008

2010

female male

work days per year

Page 20: Rural labour markets in india

Paid work and wage rates, 2010

0

50

100

150

200

250

Male Female Male Female

Farm Non-farm

Non-farm sector even lopsided educational policy is gender

biased

Paid work (Days) Wages rate (Rs/day)

Page 21: Rural labour markets in india

0

50

100

150

200

250

300

Un-irrigated Irrigated Un-irrigated Irrigated

Female Male

Self-employment days (days) and wage rates (Rs/day), 2010

self-employment Wage rates

Page 22: Rural labour markets in india

0

50

100

150

200

250

300

350

400Illit

era

te

Pri

mar

y

Mid

dle

Hig

h

Inte

r

Hig

h

educa

ted

Illit

era

te

Pri

mar

y

Mid

dle

Hig

h

Inte

r

Hig

h e

duca

ted

Female Male

Education level by paid work (days) and wage

rates (Rs/day) in 2010

Paid work Wage rates

Page 23: Rural labour markets in india

0

20

40

60

80

100

120

140

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1989

2005

2006

2007

2008

2009

2010

Real wages in farm sector

(1986 prices) (Rs/day for male and females; Rs/pair days for

bullock labour; Rs/hour of tractor work)

Bullock

Female

Male

Tractor

Page 24: Rural labour markets in india

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010

wag

e r

ate (

Rs/

day

) Rural non-farm sector wage rates in

constant prices (Rs/day)

Female Male

Page 25: Rural labour markets in india

Urban migration of male population in Andhra Pradesh

Page 26: Rural labour markets in india

50

100

150

200

250

300

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Rs/

day

All India Real wage Rates (at constant prices of 2011)

Mason Carpenter Tractor Driver Ploughing

Sowing Harvesting Unskilled Labourers

Page 27: Rural labour markets in india

100

150

200

250

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

slack peak

Seasonal real wage rates (Rs/day) at 2011 prices

Mason Carpenter Tractor Driver Ploughing

Harvesting Sowing Unskilled Labourers

Page 28: Rural labour markets in india

Work type

Mean 2012

(Rs/day)

Annual growth rates

Slack Peak

2001-07 2008-12 2001-07 2008-12

Mason(construction) 269 -1.3 4.5 -0.9 5.4

Carpenter 243 -0.9 4.5 -0.8 5.5

Well digging 231 -0.4 8.5 -0.7 10.3

Tractor Driver 194 -0.5 5.6 -0.4 5.9

Blacksmith 186 -1.7 4.9 -1.4 6.2

Ploughing 184 -1.4 6.1 -1.2 7.1

Sowing 163 -1.6 6.5 -0.7 7.4

Cane crushing 162 1.5 6.3 0.5 8.2

Harvesting 161 -0.5 7.7 0.2 8.3

Unskilled Laborers 158 -0.9 7.8 -0.5 7.6

Threshing 158 -1.3 8.8 -0.2 7.3

Transplanting 151 0.2 7.2 0.4 7.2

Winnowing 149 0.4 6.8 0.8 7.4

Picking 148 -0.3 8.1 -0.7 7.2

Weeding 145 -0.1 6.9 0.1 7.2

Cobbler 131 -1.4 3.9 -1.1 5.2

Sweeper 112 -1.9 5.7 -1.7 6.2

Herdsman 101 -2.3 8.0 -2.2 8.4

ACGR of real wage rates (%)

Page 29: Rural labour markets in india

Year Mason Carpenter Tractor

Driver Ploughing Sowing Harvesting

Unskilled

Laborers

High wage rate states

Tamil Nadu (P) 7.8 7.8 7.1 6.4 6.9 7.8 7.1

Tamil Nadu(S) 6.7 6.3 6.2 5.4 5.8 7.1 6.6

Andhra Pradesh(P) 5.7 5.7 6.9 9.6 9.4 8.7 8.2

Andhra Pradesh(S) 5.6 5.9 5.5 10.2 7.7 9.0 8.4

Haryana(P) 1.6 3.3 3.7 6.3 4.8 3.3 5.0

Haryana(S) 1.4 3.4 3.0 4.3 4.1 3.5 5.3

Punjab(P) 2.5 2.3 7.3 4.8 4.7 7.3 6.0

Punjab(S) 1.3 1.5 5.5 4.5 5.6 5.5 4.6

Medium wage rate states

Karnataka(P) 2.5 3.2 3.4 8.2 6.9 7.8 6.2

Karnataka(S) 2.1 3.0 4.1 5.7 6.2 7.0 5.7

Maharashtra(P) 2.6 2.2 4.4 6.3 6.2 7.0 5.5

Maharashtra(S) 1.3 1.4 3.5 4.8 5.1 5.0 4.0

Rajasthan(P) 3.3 3.0 2.9 3.3 4.4 7.9 6.5

Rajasthan(S) 3.3 2.1 2.0 4.8 0.4 7.0 6.6

West Bengal(P) 1.2 0.7 1.0 1.8 4.1 4.0 4.3

West Bengal(S) 0.3 -0.3 0.8 2.5 4.0 4.1 3.9

Gujarat(P) 0.3 -1.5 -1.5 0.5 -0.4 0.8 1.4

Gujarat(S) -1.0 -2.5 -1.7 -0.3 -1.3 -0.3 0.6

Low wage rates states

Uttar Pradesh(P) 2.9 1.9 3.7 4.1 4.3 4.1 5.2

Uttar Pradesh(S) 1.7 0.6 2.9 2.1 3.4 3.2 4.0

Bihar(P) 1.9 1.3 2.0 4.5 4.1 3.1 4.6

Bihar(S) 1.0 0.3 1.7 4.1 2.8 2.1 3.7

Orissa(P) 1.6 0.8 -0.9 6.8 5.3 5.8 6.8

Orissa(S) 0.7 -0.1 -1.2 6.6 7.0 6.7 6.5

MP(P) -0.6 -0.5 3.3 3.8 4.2 5.2 4.1

MP(S) -4.8 -1.0 1.8 2.2 2.2 2.5 3.6

All India(P) 2.5 2.3 3.4 4.5 4.1 5.0 5.2

All India(S) 1.8 1.6 2.7 3.8 3.4 4.0 4.7

Annual compound growth rates of real wage rates (2005-12),

Page 30: Rural labour markets in india

State Period AP Punjab Haryana TN All India

Unskilled P-I 3.5 5.0 0.7 2.6 3.6

P-II 7.1 7.4 5.8 5.8 5.1

Over all 2.9 4.3 1.7 2.9 2.9

Ploughing P-I 2.5 1.0 2.1 5.1 1.3

P-II 10.3 6.3 6.4 6.5 4.7

Over all 4.7 2.7 3.0 3.0 1.7

Harvesting P-I 3.0 2.0 2.4 1.3 1.0

P-II 10.3 8.1 4.1 7.2 5.1

Over all 5.2 3.1 2.6 2.5 1.8

Sowing P-I 5.1 3.1 1.8 1.7 2.1

P-II 4.2 6.8 4.9 6.9 4.3

Over all 2.2 2.8 2.7 2.3 1.9

Tractor P-I 3.2 3.9 1.9 2.5 3.7

P-II 2.5 4.0 6.6 7.5 4.5

Over all 2.2 3.4 1.9 3.0 3.0

Mason P-I 1.2 0.1 2.5 4.6 2.0

P-II 2.1 2.4 3.5 7.8 2.7

Over all 1.5 0.2 1.4 4.0 1.4

Carpenter P-I -0.5 4.3 -0.2 4.5 4.2

P-II 4.0 2.8 2.4 7.6 -1.4

Over all 0.8 1.5 0.2 3.9 0.8

ACGR of wage rates in high real wage rate states (developed states)

Page 31: Rural labour markets in india

State Period Bihar Orissa MP UP

Unskilled P-I 5.4 4.5 2.4 4.1

P-II 4.7 5.3 4.3 1.6

Over all 3.9 3.1 1.6 1.5

Harvesting P-I 2.6 2.2 2.1 3.5

P-II 4.4 7.2 0.7 4.7

Over all 2.2 3.2 0.9 2.3

Sowing P-I 4.2 5.7 4.7 4.4

P-II 4.5 4.0 3.5 -0.2

Over all 2.8 3.5 2.1 1.8

Tractor P-I 3.0 2.1 4.5 2.3

P-II 4.5 3.7 -0.6 3.0

Over all 2.8 2.4 1.8 1.0

ploughing P-I 5.3 4.1 3.7 4.0

P-II 4.8 7.0 3.2 3.7

Over all 4.2 3.6 2.1 2.7

Mason P-I 4.8 4.2 1.5 3.8

P-II 2.0 1.6 -0.7 1.3

Over all 2.8 2.0 0.2 1.8

Carpenter P-I 5.4 4.0 2.3 3.7

P-II 3.5 6.3 -0.2 0.8

Over all 2.5 3.2 0.6 1.7

ACGR in low real wage rate (less developed) states

Page 32: Rural labour markets in india

Ratio of male to female wage rates

Farm and non-farm sector

0.0

0.5

1.0

1.5

2.0

2.5

2002

2003

2004

2005

2006

2007

2008

2009

2010

Rat

io

farm work non-farm work

Linear (farm work) Linear (non-farm work)

Declining gender wage gap

Page 33: Rural labour markets in india

Ratio of wage rates(non-farm to farm)

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

2002

2003

2004

2005

2006

2007

2008

2009

2010

Rat

io

Male

Female

Linear (Male)

Linear (Female)

Page 34: Rural labour markets in india

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Rat

io

Ratio of wage rates of mason to ploughing

Uttar Pradesh Gujarat Rajasthan Bihar

Orissa Punjab Madhya Pradesh Maharashtra

All India Haryana Karnataka Tamil Nadu

Andhra Pradesh West Bengal

Page 35: Rural labour markets in india

-60

-40

-20

0

20

40

60

80

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2006

2007

2008

2009

2010

2011

2012

The coefficients for the year dummies on wages

ploughing harvesting unskilled sowing

mason tractor carpenter

Page 36: Rural labour markets in india

0

2

4

6

8

10

12

14

16

18

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

2005

2006

2008

2009

2010

1979

1980

1981

1982

1983

1984

2005

2006

2008

2009

2010

female male

Rat

io: t

op t

o b

ott

om

Disparities in wage rates

9th percentile to 2nd percentile

10th percentile to 1st percentile

Page 37: Rural labour markets in india

Work type /item Female Male % over female

(I) Hours with economic activities 23.1 36.2 56.7 Paid work 12.3 20.8 69 Own farm 5.2 8.5 62 Own livestock 5.1 6.3 24 Other own 0.5 0.6 33 (II)Hours with non-economic activities 28.1 8.8 -68.7 Domestic duties 26.3 6.5 -75 Seriously ill 0.9 0.6 -33 Unemployed 0.9 1.7 83

Hours with economic and non-economic activities (I+II) 51.2 45.0 -12.1

Wage income ( /year) 7920 27000 241 Wage rate ( /8 hours) 99 200

102 Imputed income , if income of non-monetary work days are

imputed with on-going wage rates for male and female

respectively

32967 58400

77 Imputed income , if income of non-monetary work days of both

men and women at the on-going wage rates of female ( 99/8

hours)

32967 42551

29.1 Average level of education 5 8

Average hours/week of female and male (2010)

Page 38: Rural labour markets in india

Salient features

Structural transformation in rural economy

Raising real wage rates

Divergence in wage rates

Stagnation in labour productivity in agriculture

Shift in engines of growth

Increase in rural non-farm sector and diversity of income

Page 39: Rural labour markets in india

Long run trends.. Most of the workers are spent more days in self-employment in agriculture with

very few days in paid work. Both men and women have more leisure time during

the 1970s compared to early 2000s. However, from 2001 onwards, there has been

an increase in non-farm employment opportunities in both self-employment and

also paid work mostly for rural male, but most of the rural women remained in

farm sector. Results also shows that even though education improves chances of

getting higher remunerative employment, still rural labour markets are segmented

based on social groups to 2 some extent. The high unemployment among

educated youth indicates that the skills acquired by the educational system are

not meeting the needs of the rural economy. However, many parents are investing

heavily in children’s education with the expectation of getting higher paid urban

jobs. Over the period, gender and caste differences in wage rates decreased

slightly, but are not eliminated wholly.

Page 40: Rural labour markets in india

Long run trends.. Men work days are more than women work days per year,

however If we take domestic work into consideration women work more days than men. Attached labourer are almost eliminated with the implementation of bonded labour abolition act and most of them shifted to different occupations including cultivation or casual agricultural labourer or took up petty businesses. There is significant increase in farm mechanisation in recent years due to scarcity of labour and higher wage rates. The results also show that the real wage rates started increasing much before the introduction of a major employment guarantee program (MGNREGA) and mostly driven by increased non-farm employment opportunities, rural-urban linkages, migration and increased agricultural productivity.

Page 41: Rural labour markets in india

Conclusions

Overall, men reported 36.2 hours per week compared to only 23.1

hours per week in economic activities.

If we consider both economic and non-economic activities,

participation of women increased to 51.2 hours compared to only 45.0

for men as women spent more hours in attending domestic duties.

However, men work more hours in paid work (20.8 hours) than

women (12.3 hours).

The gap in income earned from monetary activities between men and

women is much higher. But, if we impute the value of the domestic

duties of both men and women equally, the gap in incomes between

men and women drastically reduced from 241% to just 29%.

Illiterate women loaded with more hours of paid-work as well as

domestic work. Labor markets are segmented based on social

background to some extent (after discounting for human and physical

capital) and supports segmented labor market theory.

Page 42: Rural labour markets in india

Conclusions Cont.. It is interesting to see that the hours worked in economic activities

increases with ownership of land and assets rather than education in rural India.

Level of education and experience have little influence on choice of occupation and quality of employment of individuals both men and women, as still rural employment in rural India is mostly confined to the technologically backward sectors even in non-farm sector and business like petty business, general stores, toddy tapping, repair shops, transport and construction works which require very little skill levels and education levels.

However, the quality of work improves significantly for only few higher educated men and women in service sector employment like teachers, nurses, record keeper, health workers; most of the educated youth remain unemployed. Especially most of the educated women engaged in domestic duties due to lack of commensurate employment opportunities in rural areas. Even though in the villages returns to education is low or non-significant, people are investing heavily in educating their children with the expectation of getting urban employment mostly as engineer or doctor or even a software engineer in America etc.

Most of the parents persuade their children to go to urban centres as soon as they completed the higher education with expectation of huge remittance money.

Page 43: Rural labour markets in india

THIS CONFIRMS THAT AT LEAST DEVELOPED STATES IN INDIA CROSSED THE LEWIS TURNING POINT.

THE ACCELERATION OF REAL WAGES EVEN IN SLACK SEASON INDICATES THAT THE ERA OF LABOR

SHORTAGE IS STARTED IN RURAL AREAS ESPECIALLY IN DEVELOPED STATES LIKE TAMIL NADU,

HARYANA, PUNJAB AND ANDHRA PRADESH, WHICH NEEDS TO BE TACKLED THROUGH LABOR SAVING

TECHNOLOGY AND WIDE SCALE FARM MECHANISATION. ON THE OTHER HAND IT APPEARS THAT

THE UNDERDEVELOPED STATES LIKE MADHYA PRADESH, UTTAR PRADESH AND BIHAR ARE NOT

REACHED THE LTP AND NEEDS TO DEVELOP POLICIES TO INCREASE PRODUCTIVITY OF RURAL LABOR

IN THESE BACKWARD STATES.

Wage rates…..

Page 44: Rural labour markets in india

Rural society in India is traditionally highly segmented based on caste, gender and

traditional occupations, however, they are slowly reducing their influence on labor

market outcomes as they are not significant in choice of employment or hours worked,

they are replaced by the ownership of land and assets and owning high productive land

(like irrigated area) in influencing the labor market outcomes.

Demand for some caste occupations like traditional toddy-tapping (making locally

made alcohol), cleaning of cloths, etc is increasing in near-by towns which can be

captured by rural men and women with middle level of education.

Some of the policy prescriptions from the study are

• Enhancing the ownership of assets like land, irrigated area through providing loans

which will increase hours worked in economic activities

•Imbibing savings habit which generally increase labor force participation rate,

•Enhancing quality education in rural areas beyond the higher-secondary to take

advantage of growing employment in service sector and new emerging occupations like

repair of mobiles, electric motors computer centres

•Imparting skill development in both caste occupations and also in modern sectors and

•Balanced development of both urban and rural areas through promotion of small

towns.

Policy Options..

Page 45: Rural labour markets in india