Disha NEET Physics Guide for classes 11 and 12.pdf
Rural labour markets in india
1. Rural Labour Markets in
India
A Amarender Reddy
ICRISAT
a.amarenderreddy@cgiar.org
Anugu.amarender.reddy@gmail.com
2. 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
3. Objectives and Methods
The study used the data ofVillage 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.
4. 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
6. 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
Labourproductivity(non-agril/agril)
Shareoflabour(%)
MacroTrends in GDP and labour productivity
share of non-agricultural labour
share of agril. Labour
Labour productivity gap between agril and non-agril
13. Major occupation of workers
(Male in %) by education
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Illiterate
readandwrite
uptoprimary
uptomiddle
highschool
diploma
graduate
All
primary
middle
highschool
inter
diploma
graduation
postgraduation
Total
1975 2010
all others
RFS
Farm labour
Farming
14. Female work structure by education level
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Illiterate
readandwrite
uptoprimary
uptomiddle
highschool
graduate
All
illiterate
primary
middle
highschool
inter
diploma
graduation
postgraduation
Total
1975 2010
Others
Farming
Farm labor
15. 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
16. 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
17. 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
18. 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)
19. 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
20. 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)
30. 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)
31. 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
32. 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
Ratio
farm work non-farm work
Linear (farm work) Linear (non-farm work)
Declining gender wage gap
33. 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
Ratio
Male
Female
Linear (Male)
Linear (Female)
37. 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)
38. 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
39. 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.
40. 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.
41. 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.
42. 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.
43. THIS CONFIRMSTHAT AT LEAST DEVELOPED STATES IN INDIA CROSSED THE LEWISTURNING POINT.
THE ACCELERATION OF REAL WAGES EVEN IN SLACK SEASON INDICATESTHATTHE ERA OF LABOR
SHORTAGE IS STARTED IN RURAL AREAS ESPECIALLY IN DEVELOPED STATES LIKETAMIL NADU,
HARYANA, PUNJAB AND ANDHRA PRADESH,WHICH NEEDSTO BETACKLEDTHROUGH LABOR SAVING
TECHNOLOGY AND WIDE SCALE FARM MECHANISATION. ONTHE OTHER HAND IT APPEARSTHAT
THE UNDERDEVELOPED STATES LIKE MADHYA PRADESH, UTTAR PRADESH AND BIHAR ARE NOT
REACHEDTHE LTP AND NEEDSTO DEVELOP POLICIESTO INCREASE PRODUCTIVITY OF RURAL LABOR
INTHESE BACKWARD STATES.
Wage rates…..
44. 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..