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How does poverty decline? Evidence from India, 1983-1999

Author

Listed:
  • Mukesh Eswaran

    (University of British Columbia)

  • Ashok Kotwal

    (University of British Columbia)

  • Bharat Ramaswami

    (Indian Statistical Institute, New Delhi)

  • Wilima Wadhwa

    (University of California)

Abstract
This paper attempts to assess the relative contributions of the farm and non-farm sectors to the increase in agricultural wage earnings in India between 1983-1999. Cross-section analysis of NSS data for 1983 and 1993 confirm the importance of farm productivity growth, consistent with the predictions of our theoretical model. A counterfactual exercise that attempts to estimate the relative contribution of the non-farm sector to the increase in the agricultural wage earnings during the period 1983-1999 suggests that this figure is no more than 25 at the all-India level, though it is higher in some states. Thus the bulk of the growth in wage earnings and the attendant decline in poverty during this period appears to be due to the farm sector.

Suggested Citation

  • Mukesh Eswaran & Ashok Kotwal & Bharat Ramaswami & Wilima Wadhwa, 2007. "How does poverty decline? Evidence from India, 1983-1999," Discussion Papers 07-05, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:07-05
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    File URL: http://www.isid.ac.in/~pu/dispapers/dp07-05.pdf
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    References listed on IDEAS

    as
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    5. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    6. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
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    11. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," The World Bank Economic Review, World Bank, vol. 10(1), pages 1-25, January.
    12. Foster, Andrew D & Rosenzweig, Mark R, 2004. "Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 509-542, April.
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    Citations

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    Cited by:

    1. Peter Lanjouw & Rinku Murgai, 2009. "Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 243-263, March.
    2. Hanan G. Jacoby, 2016. "Food Prices, Wages, And Welfare In Rural India," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 159-176, January.
    3. Eshita Gupta & Bharat Ramaswami & E. Somanathan, 2021. "The Distributional Impact of Climate Change: Why Food Prices Matter," Economics of Disasters and Climate Change, Springer, vol. 5(2), pages 249-275, July.
    4. Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2015. "Preferences, Spatial Prices and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 51(11), pages 1488-1501, November.

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    More about this item

    Keywords

    Farm and non-farm productivity growth; non-farm employment; poverty; wage earnings;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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