Wages, Employment and Output in Interrelated Labour Markets in an Agrarian Economy: A Study of Kerala

This paper examines the wage structure and wage movements and their relation to employment and output in an agrarian economy in transition. In order to explain wage movements in such an economy, the paper develops the concept of 'interrelated labour markets'. The paper is divided into four...

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Veröffentlicht in:Economic and political weekly 1991-06, Vol.26 (26), p.A82-A96
1. Verfasser: Krishnan, T N
Format: Artikel
Sprache:eng
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Zusammenfassung:This paper examines the wage structure and wage movements and their relation to employment and output in an agrarian economy in transition. In order to explain wage movements in such an economy, the paper develops the concept of 'interrelated labour markets'. The paper is divided into four sections. The first section analyses the wage structure in agriculture and in construction activity both in the rural and urban sectors for those categories of labour that are paid daily wages. The validity of the concept of interrelated labour markets is verified by estimating vector autoregressions and testing for significant causal relations among the included wage rates. The second section develops a theory of wage structure in the context of interrelated labour markets which emphasises the importance of social norms in labour market behaviour. The third section examines movements in wage relativities in relation to changes in product demand. The final section develops analytical model to explain employment behaviour in interrelated labour markets and applies this model to explain the changes in employment and output in the agricultural sector of the Kerala economy.
ISSN:0012-9976
2349-8846