Is There Surplus Labor in Rural India?

Andrew Foster and Mark Rosenzweig

No 95273, Center Discussion Papers from Yale University, Economic Growth Center

Abstract: 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.

Keywords: Agricultural and Food Policy; Agricultural Finance; Crop Production/Industries; International Development; Land Economics/Use; Production Economics; Productivity Analysis; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 48
Date: 2010-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Related works:
Working Paper: Is There Surplus Labor in Rural India? (2010)
Working Paper: Is There Surplus Labor in Rural India? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:yaleeg:95273

DOI: 10.22004/ag.econ.95273

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