Poverty Decline, Agricultural Wages, and Non-Farm Employment in Rural India 1983–2004

The authors analyze five rounds of National Sample Survey data covering 1983, 1987/8, 1993/4, 1999/0, and 2004/5 to explore the relationship between rural diversification and poverty. Poverty in rural India declined at a modest rate during this per...

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Bibliographic Details
Main Authors:	Lanjouw, Peter, Murgai, Rinku
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ADULT MALES AGE GROUPS AGRICULTURAL DEVELOPMENT AGRICULTURAL EMPLOYMENT AGRICULTURAL GROWTH AGRICULTURAL LABOR AGRICULTURAL LABORERS AGRICULTURAL LABOUR AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTIVITY GROWTH AGRICULTURAL SECTOR AGRICULTURAL WAGE AGRICULTURAL WAGE EMPLOYMENT AGRICULTURAL WAGE LABOR AGRICULTURAL WAGES AGRICULTURAL WORKERS CASUAL WORKERS CHANGES IN POVERTY COMPARABILITY PROBLEMS CONSUMPTION POVERTY CONSUMPTION QUINTILES CORRELATES OF POVERTY CRISES CROP CROP PRODUCTION CROPS CULTIVATION DAILY WAGE DATA QUALITY DECLINE IN POVERTY DEMOCRACY DETERMINANT OF POVERTY DETERMINANTS OF POVERTY DEVELOPMENT ECONOMICS DISADVANTAGED GROUPS DRIVERS ECONOMIC DIVERSIFICATION ECONOMIC GROWTH EMPLOYEE EMPLOYMENT GENERATION EMPLOYMENT GROWTH EMPLOYMENT LEVELS EMPLOYMENT PATTERNS EMPLOYMENT PROBABILITIES EMPLOYMENT RATE EMPLOYMENT RATES EMPLOYMENT SHARE EMPLOYMENT STATUS EMPLOYMENT TRENDS ESTIMATES OF POVERTY EXTERNALITIES FARM FARM ACTIVITIES FARM ECONOMY FARM EMPLOYMENT FARM GROWTH FARM INCOME FARM INCOME SHARE FARM INCOMES FARM PRODUCTION FARM PRODUCTIVITY FARM PRODUCTS FARM SECTOR FARM SELF- EMPLOYMENT FARM SELF-EMPLOYMENT FARM WORKERS FEMALE WORKERS GENERAL EQUILIBRIUM GRAIN HARVESTING HOUSEHOLD CHARACTERISTICS HOUSEHOLD INCOMES HOUSEHOLD SURVEYS HUMAN CAPITAL HUMAN DEVELOPMENT IMPACT ON POVERTY INCIDENCE OF POVERTY INCOME EARNING INCOME SHARES INDICATORS OF POVERTY INEQUALITY JOBS LABOR ECONOMICS LABOR FORCE LABOR MARKET LABOR MARKETS LAND AVAILABILITY LAND HOLDINGS LANDHOLDINGS LONG-TERM EMPLOYMENT MOTIVATION NON-FARM EMPLOYMENT NON-FARM SECTOR OCCUPATION OCCUPATIONS PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POOR HOUSEHOLDS POPULATION GROWTH POVERTY ESTIMATES POVERTY IMPACT POVERTY LINES POVERTY RATES PRECEDING SECTIONS PRESENT EVIDENCE PRESENT STUDY PRESENTED EVIDENCE PREVIOUS SECTION PRIMARY EDUCATION PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCE PRODUCTIVE ACTIVITIES PRODUCTIVITY DATA PUBLIC SPENDING REAL WAGE REAL WAGES REDUCTION IN POVERTY REGULAR EMPLOYMENT REGULAR JOBS REGULAR WORKERS RETAIL TRADE RURAL RURAL AREA RURAL AREAS RURAL EMPLOYMENT RURAL GROWTH RURAL HOUSEHOLD RURAL HOUSEHOLD INCOME RURAL INCOME RURAL INCOME GENERATION RURAL INDUSTRIES RURAL INEQUALITY RURAL LABOR RURAL LIVELIHOODS RURAL LIVING STANDARDS RURAL POOR RURAL POPULATION RURAL POVERTY RURAL POVERTY REDUCTION RURAL WORKFORCE SAFETY SAFETY NET SALARIED EMPLOYMENT SELF EMPLOYMENT SKILLED LABOR SOWING TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY TRANSPLANTING UNEMPLOYED UNEMPLOYMENT WAGE DATA WAGE DETERMINATION WAGE GROWTH WAGE INCREASE WAGE RATE WAGE RATES WELFARE IMPROVEMENTS WORKER YIELDS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090309082434 http://hdl.handle.net/10986/4054

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Summary:	The authors analyze five rounds of National Sample Survey data covering 1983, 1987/8, 1993/4, 1999/0, and 2004/5 to explore the relationship between rural diversification and poverty. Poverty in rural India declined at a modest rate during this period. The authors provide region-level estimates that illustrate considerable geographic heterogeneity in this progress. Poverty estimates correlate well with region-level data on changes in agricultural wage rates. Agricultural labor remains the preserve of the uneducated and also to a large extent of the scheduled castes and scheduled tribes. Although agricultural labor grew as a share of total economic activity over the first four rounds, it had fallen back to the levels observed at the beginning of the survey period by 2004. This all-India trajectory masks widely varying trends across states. During this period, the rural non-farm sector grew modestly, mainly between the last two survey rounds. Regular non-farm employment remains largely associated with education levels and social status that are rare among the poor. However, casual labor and self-employment in the non-farm sector reveal greater involvement by disadvantaged groups in 2004 than in the preceding rounds. The implication for poverty is not immediately clear - the poor may be pushed into low-return casual non-farm activities due to lack of opportunities in the agricultural sector rather than being pulled by high returns offered by the non-farm sector. Econometric estimates reveal that expansion of the non-farm sector is associated with falling poverty via two routes: a direct impact on poverty that is likely due to a pro-poor marginal incidence of non-farm employment expansion; and an indirect impact attributable to the positive effect of non-farm employment growth on agricultural wages. The analysis also confirms the important contribution to rural poverty reduction from agricultural productivity, availability of land, and consumption levels in proximate urban areas.

Poverty Decline, Agricultural Wages, and Non-Farm Employment in Rural India 1983–2004

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