The agricultural wage gap within rural villages

Abstract

We use unique data on daily labor-market outcomes for Indian casual workers to study labor reallocation between agricultural and non-agricultural activities within rural areas. Controlling for both individual time-invariant attributes and time-varying shocks, we find that workers who switch sectors across years or even within a week can obtain 23% higher wages by taking non-agricultural jobs. We then estimate a discrete choice model of daily labor allocation that decomposes preferences for jobs into two types of disamenities: (i) those associated with job characteristics and (ii) those associated with location. We find that the first type of disamenity is 23% of wages for men and 38% for women, and the second type is 36% of wages for men and 31% for women.