Wages in Kind and Economic Development: Historical and Contemporary Evidence from Asia

Takashi Kurosaki

No 11, PRIMCED Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper investigates the function of various modes of wage payment, focusing on the role of in-kind wages in enhancing household food security when markets are underdeveloped. Historical records from Asian countries, including pre-war Japan and colonial India, demonstrate the importance of in-kind wage payment in the initial phase of economic development. However, there is a paucity of theoretical explanations of in-kind wages in terms of their function and rationale in existing literature. This paper therefore develops a theoretical model that explains labor supply under different labor contracts, by incorporating considerations of food security as the main explanation for in-kind wages. The model predicts that when food security considerations are important for workers, owing to poverty and thin food markets, they tend to work more under contracts where wages are paid in kind (food) than under contracts where wages are paid in cash. This prediction is supported by empirical evidence from rural Myanmar. Estimation results of the reduced-form determinants of labor supply show that workers supply more labor for work paid in kind when the share of staple food in the workers’ household budget is higher and the farmlands on which they produce food themselves are smaller.

Keywords: agrarian contract; in-kind wages; incentive; food security; Myanmar (search for similar items in EconPapers)
JEL-codes: J33 O12 Q12 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-03
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-lab and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/19422/No11-dp_10_011.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hit:primdp:11

Access Statistics for this paper

More papers in PRIMCED Discussion Paper Series from Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().