Leadership Investigate

Is There Surplus Labor In Rural India?

Download now Free registration required

Executive Summary

The authors 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 employs 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, they estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres.

  • Format: PDF
  • Size: 314.92 KB