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

By Peter Lanjouw, Rinku Murgai. 2009

233 citations recorded by the source corpus.

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.

Subfields: Sociology and Political Science, Soil Science

View Paper: https://www.semanticscholar.org/paper/d551dea692ee3c74c3d0579050f7eb9f76535ebd

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Citations in the corpus

Non-farm diversification, poverty, economic mobility and income inequality : a case study in village India (2013, unknown): “5 Lanjouw and Murgai, 2009; Himanshu, 2008; Eswaran et. al., 2009.”
Does Non-farm Income Affect Food Security? Evidence from India (2019, background): “…and employment opportunities in India has been responsible for reduction in rural poverty and income inequality (Azam, 2012; de Janvry & Sadoulet, 2001; Himanshu, Lanjouw, Murgai, & Stern, 2013; Imai, Gaiha, & Thapa, 2015; Lanjouw & Murgai, 2009; Lanjouw & Shariff, 2004; Olale & Henson, 2013).”
Poverty reduction during the rural-urban transformation - The role of the missing middle (2013, unknown): “…activities in poverty reduction, with rural towns, which mediate the flow of inputs, goods and services between rural hinterlands and large urban centers, seen as the most effective generators of nonfarm employment for the poor (Haggblade, Hazell, and Reardon, 2007; Lanjouw and Murgai, 2009).”
Food Prices, Wages, and Welfare in Rural India (2013, unknown): “Indeed, rising wages are seen as the major driver of rural poverty reduction in recent decades (Datt and Ravallion 1998; Eswaran et al. 2007; Lanjouw and Murgai 2009).”
Urbanization and poverty reduction - the role of rural diversification and secondary towns (2013, background): “…Todo1 JEL codes: O18, R11 Keywords: Poverty, rural-urban transformation, rural non-farm economy, structural transformation, urban concentration Sector Board: Economic Policy 1 Luc Christiaensen (lchristiaensen@worldbank.org), Joachim De Weerdt (j.deweerdt@edi-africa.com) and Yasuyuki Todo…”
Can group farms outperform individual family farms? Empirical insights from India (2018, unknown): “…of existing and new entrants to the workforce, given limited prospects for this in the non-farm sectors of most developing countries (Imai et al., 2014, Hazell, Poulton, Wiggins, & Dorward, 2010), including India (Chand, Srivastava, & Singh, 2017; Himanshu et al., 2013; Lanjouw & Murgai, 2009).”
Inequality of Educational Opportunity in India: Changes Over Time and Across States (2012, background): “Between 1983 and 2004, rural poverty declined from 46.9% to 28.4%, at a rate of one percentage point a year (Lanjouw and Murgai, 2009).”
OBSTACLES FACE PHYSICAL EDUCATION AT SCHOOLS IN AL MADENAH AL MUNAWARAH - KSA (2013, background): “Thus, many research work recommended that the non-farm employment should be developed more particularly among farm households in order to increase share in agricultural household income (Lanjouw and Murgai, 2009; Davis et al., 2009, Idowu et al., 2011).”