Bihar has been showing signs of emerging from stagnation and backwardness. For this to occur in full, an agrarian transformation is central in a state where urbanisation remains very low. This paper uses longitudinal household data from a sample of villages to explore changes in production relations, land and other assets, agricultural development and occupational diversification. There has been a significant change in class structure and a shift away from agricultural occupations for male workers (much less for female), but non-agricultural work is mainly outside the village and largely outside the state. Real wages have risen substantially, more than can be explained by rising agricultural productivity, migration being an important contributory factor. But the segmentation of the rural labour market has increased and local development is uneven.
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