Urban Sprawl And Rural Development: Theory And Evidence From India

Viktoria Hnatkovska and Amartya Lahiri

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: We examine the evolution of the fortunes of rural and urban workers in India between 1983 and 2010, a period of rapid growth in India. We find evidence of a significant convergence of education attainments, occupation distribution, and wages of rural workers towards those of urban workers. However, individual worker characteristics account for at most 40 percent of the wage convergence. We develop a two-sector model of structural transformation to rationalize the rest of the rural-urban wage convergence in India as the consequence of urbanization through land reclassification induced by productivity growth.

Keywords: Rural urban disparity; wage gaps; urbanization (search for similar items in EconPapers)
JEL-codes: E2 O1 R2 (search for similar items in EconPapers)
Date: 2017-11
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