Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economics and Planning Unit (EPU-Delhi)


Ray, Debraj (EPU-Delhi; ISI)

Abstract (Summary of the Work)

A large proportion of the labour force in India (that is, 66.56% of the main workers according to the Census of India, 1981) is engaged in agriculture. Just this simple fact would make a study of the functioning of agricultural labour markets highly important. But quite apart from this observation, there are several reasons for a detailed study of rural labour markets, particularly in the context of the problem of economic development.A major issue facing developing economies is industrial growth. The agricultural sector can foster growth by creating demand for industrial products, by providing a supply of certain primary inputs, supplies of food for the growing industrial labour force, and possible a supply of capital. All of these issues necessitate, at some level, a study of rural labour markets. But there is a more fundamental fact, the agricultural sector provides a basic factor of production to the growing industrial sector: labour. One of the key factors influencing the supply of such labour is the functioning of the agricultural labour market. My focus in this dissertation is on the role that seasonality plays in the functioning of labour markets.Specifically, I analyze two issues: the existence of involuntary unemployment in the casual labour market (in the sense that unemployed labourers are strictly worse off than the employed labourers) and the existence of long-term labour contracts (known in the literature as labour tying) in agricultural labour markets.I have chosen these two issues, in preference to other, less discussed issues primarily because of their obvious importance in determining the income level of rural agricultural labourers. An understanding of the issues of wage determination will also facilitate analysis of other important phenomena such as seasonal and permanent migration from villages. A secondary reason is the strong feeling, induced by the perusal of the theoretical literature on the subject, that the theme of seasonality has been underplayed in the context of casual labour and overexploited in the context of labour tying.A study of various features of agrarian labour markets has also immediate nor- mative implications. Economic development implies a right to a better life for the agents in the economy. In this context, the agricultural labour force cannot be ignored. Government intervention to improve their conditions requires knowledge about their socio-economic characteristics. Indeed, this subject has received much attention. However, if the programmes are to be effective, knowledge is also re- quired about the working of the labour market. In other words, policy intervention to bring about a change in the desired direction needs to be self-enforcing, without which it will either be a failure, or require constant monitoring to ensure success.Consider for instance the legislation in India to abolish sharetenancy, under which the tenant could claim ownership rights on the plot cultivated by him. While this has had the effect of abolition of formal land tenancy contracts, and has led to an appreciable shortening of the period of duration of a contract, sharecropping has by no means disappeared. This means that it is still in the interest of agents to enter tenancy contracts and superficial action such as simple prohibition, can not stop them from entering these contracts.Another interesting example is that of public works to provide alternative em- ployment to agricultural labourers.


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