IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id12774.html
   My bibliography  Save this paper

Rural Wage Dynamics in India: What Role does Inflation Play?

Author

Listed:
  • Sujata Kundu

Abstract

This paper studies the relationship between rural wage growth and inflation in India to assess the risk of a wage - price spiral to the inflation trajectory. The results of a cointegration and Vector Error Correc tion Model (VECM) show that in the long - run both nominal agricultural wages and non - agricultural wages exhibit statistically significant positive relationship with rural prices. Findings of a dynamic panel data model using Arellano - Bover/Blundell - Bond syst em of generalized method of moments (GMM) structure show that during November 2013 - November 2017, changes in rural prices had a positive and significant impact on changes in nominal wages, controlling for other determinants such as non - agricultural wages, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) wages and rainfall departure from normal. The results also point to significant stickiness in nominal wages and the presence of a statistically significant positive impact of non - farm (con struction sector) wages on agricultural wages. This paper does not find any robust empirical support for the risk of a wage - price spiral in India during the period of study.

Suggested Citation

  • Sujata Kundu, 2018. "Rural Wage Dynamics in India: What Role does Inflation Play?," Working Papers id:12774, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:12774
    Note: Working Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Articles/show_Article.aspx?acat=WorkingPapers&aid=12774
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sitikantha Pattanaik & Silu Muduli & Soumyajit Ray, 2020. "Inflation expectations of households: do they influence wage-price dynamics in India?," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 13(3), pages 244-263, September.
    2. Koblianska, Inna & Seheda, Serhii & Khaietska, Olha & Kalachevska, Larysa & Klochko, Tetiana, 2022. "Determinants of potato producer prices in the peasant-driven market: the Ukrainian case," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3), June.
    3. Diego Maiorano, 2019. "The 2019 Indian Elections and the Ruralization of the BJP," Studies in Indian Politics, , vol. 7(2), pages 176-190, December.
    4. SJ, Balaji & Pal, Suresh, 2021. "Agricultural Productivity, Pay-Gap, and Non-Farm Development: Contribution to Structural Transformation in India," 2021 Conference, August 17-31, 2021, Virtual 315213, International Association of Agricultural Economists.
    5. Ishan Anand & Anjana Thampi, 2021. "The Crisis of Extreme Inequality in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(3), pages 663-683, September.
    6. Sthanu R. Nair, 2019. "India’s Agrarian Performance: A Comparative Analysis of UPA and NDA Regimes," Working papers 340, Indian Institute of Management Kozhikode.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:12774. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.