Is There Surplus Labor in Rural India?

We show empirically using panel data at the plot and farm level and based on a model incorporating supervision costs, risk, credit-market imperfections and scale-economies associated with mechanization that small-scale farming is inefficient in India. Larger farms are more profitable per acre, more mechanized, less constrained in input use after bad shocks, and employ less per-acre labor than small farms. Based on our structural estimates of the effects of farm size on labor use and the distribution of Indian landholdings, we estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres.


Issue Date:
2010-10
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/95273
PURL Identifier:
http://purl.umn.edu/95273
Total Pages:
48
JEL Codes:
O13; O16; O53
Series Statement:
Economic Growth Center Discussion Paper
991




 Record created 2017-04-01, last modified 2020-10-28

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