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Improving rural wages in India

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  • Khandker, Shahidur R.

Abstract

The purpose of this paper is to identify public policy and program interventions that can increase real rural wage rates and hence reduce rural poverty. Rural wages can only increase if the demand for rural labor grows faster than its supply. The report states that whether public policies increase real agricultural wages depends on whether they promote rural non farm employment to absorb the growing labor force. For example, although educational infrastructure, public irrigation, and regulation of markets raise agricultural output, they depress real agricultural wages because they do not increase nonfarm employment. In contrast, rural electrification, roads and banks can increase real agricultural wages, because they increase nonfarm employment. Rural financial institutions and electrification reallocate labor from agriculture to rural nonfarm activities, however, while roads promote both farm and nonfarm employment.

Suggested Citation

  • Khandker, Shahidur R., 1989. "Improving rural wages in India," Policy Research Working Paper Series 276, The World Bank.
    • Handle: RePEc:wbk:wbrwps:276
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    References listed on IDEAS

    as
    1. Bhalla, Sheila, 1987. "Trends in Employment in Indian Agriculture, Land and Asset Distribution," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 42(4), October.
    2. Haggblade, Steven & Hazell, Peter & Brown, James, 1989. "Farm-nonfarm linkages in rural sub-Saharan Africa," World Development, Elsevier, vol. 17(8), pages 1173-1201, August.
    3. Liedholm, Carl & Mead, Donald C., 1987. "Small Scale Industries in Developing Countries: Empirical Evidence and Policy Implications," Food Security International Development Papers 54062, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Bhalla, Sheila, 1987. "Trends in Employment in Indian Agriculture, Land and Asset Distribution," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 42(4), October.
    5. Binswanger, Hans & Yang, Maw-Cheng & Bowers, Alan & Mundlak, Yair, 1987. "On the determinants of cross-country aggregate agricultural supply," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 111-131.
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    Cited by:

    1. Ritika Jain & Shreya Biswas, 2021. "The road to safety- Examining the nexus between road infrastructure and crime in rural India," Papers 2112.07314, arXiv.org.
    2. Hans Binswanger & Shahidur Khandker, 1995. "The impact of formal finance on the rural economy of India," Journal of Development Studies, Taylor & Francis Journals, vol. 32(2), pages 234-262.
    3. Seetanah, B. & Ramessur, S. & Rojid, S., 2009. "Does Infrastructure Alleviates Poverty in Developing Countries?," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(2).
    4. Fan, Shenggen & Chan-Kang, Connie, 2004. "Road development, economic growth, and poverty reduction in China," DSGD discussion papers 12, International Food Policy Research Institute (IFPRI).

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