ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Rural Wages during the 1990s: A Re-estimation

A major premise of economic reforms was the stimulus it was expected to give to the agriculture sector and to the demand for labour in rural areas. However, recent studies have given conflicting results regarding the trend in wages. In this paper, we re-estimate rural wage rates from the three NSS rounds for 1983, 1993-94 and 1999-2000 for 15 major states. Our results show that the growth rate of manual casual agricultural wages declined during the post-reform period with some differences at the state level. In the case of manual casual non-agricultural wages there was no decline in the growth rates at the all-India level. In the case of wages for all casual (manual and non-manual) wage labour, a decline was registered by both agricultural and non-agricultural wages in the 1990s. Analysis of the determinants of agricultural wages revealed that agricultural productivity, rural diversification, investment per hectare in agriculture, and percentage of agricultural labourers in the workforce were the key factors, with the impact of the latter two being lower in 1999-2000 compared to the earlier periods.

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