Wage Determination in a Casual Labour Market: The Case of Paddy Field Labour in Kerela

The wage rate in s casual labour market, paddy field labour, is estimated from a reduced form version of a supply and demand model after incorporating literacy, caste and the degree of modernisation in the structural equations. The empirical evidence shows that the degree of unionisation is the only factor that affects the wage rates in one of the most important labour markets in Kerala. The adjustment of paddy output and its components, area and yield, to wage increase is brought out by comparative static analysis of Kerala. The estimation of the model from district level data provides an explanation for the observed decline in output and area and increase in the yield of paddy since 1975/76. [Working Paper No. 244]