The rural labour market is undergoing significant changes mainly due to rising employment opportunities outside agriculture. The real wage rate for farm as well as non-farm rural labour is moving upwards. This has serious implications for the farm sector. This study examines the trend and pattern of rural labour diversification and identifies the underlying factors for this change. The movement of workers outside the agriculture sector was found to be influenced by a complex set of factors such as the pattern of economic growth, inter-sectoral differences in the wage rate and worker productivity, government programmes, education, and sociocultural factors prevailing in rural India.
Ramesh Chand (rc@ncap.res.in) and S K Srivastava (sksrivastava@ncap.res.in) are with the National Centre for Agricultural Economics and Policy Research, New Delhi.
The authors thank an anonymous referee of the journal for pointing out deficiencies in the original version of the paper and for suggestions for revision. However, the final paper is entirely that of the authors.
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