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Abstract

This study focuses on estimating determinants of wages across primary, secondary and tertiary sectors in rural India by the type of work contract involved. Casual labourers, with short term work contracts and nearly absent benefits and wage employees, with long term work contracts, higher wages and benefits represent dual sections of the labour market. Here we demonstrate that human capital and other factors that has been proven to explain variation in wages in other labour markets, explain little about wages in casual employment sector. Further, pattern of returns to education for casual labourers were found to decrease with increasing educational levels and was negative for higher education. Such a trend was no t noticed among wage employees, where pattern that was similar with other studies focusing on the whole labour market.

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