
This paper presents a three-sector (agricultural, organized or formal nonagricultural, and nonorganized or informal nonagricultural), time series (1959-1979) model of the labor market in India. It estimates a rural labor absorption equation, a rural wage rate determination equation, and a rural-urban migration equation for the three sectors, as interdependent parts of a seven-equation system. The estimated model generates time series estimates which are within the range of available cross-section estimates. It shows that in India the determination of both farm employment and formal employment conforms to neo-classical organization. The behaviour of earnings in the informal sector confirms the disequilibrium hypothesis that average earnings are passively and negatively related to the size of the labor force unabsorbed in the main sectors and positively related to informal output. The last section of the paper projects sectoral employment and wages and rural-urban migration over the next two decades, assuming three alternative sets of growth rates of industrial output.
Page Count:
38
Publication Date:
1984-01-01
ISBN-10:
0821303511
ISBN-13:
9780821303511
No comments yet. Be the first to share your thoughts!