Rural wages in Asia

Abstract

Rural wages in developing countries not only directly affect the welfare of many of the (very) poor, but they also affect the welfare of others through their impact on costs of food production and hence food prices. Since manufacturing in low income countries often recruits labour from the countryside, rural wages set the minimum level of factory wages 3 necessary to attract labour, and hence costs of production and thereby the growth of manufacturing. Rural wages in much of Asia seem to have been rising notably over the last 25 years or longer, with signs in some countries of accelerating increases since the mid-2000s. This study compiles the evidence for this; then examines the influence of potential determinants, including changes in agricultural labour productivity, manufacturing, and rural working population, on rural wages. It concludes by discussing the possible implications of the results for rural poverty, food prices and the location of manufacturing