Abstract
The paper seeks to analyse, at both theoretical and empirical levels, the process of determination of the wage rate and the quantum of employment of casual agricultural labourers in India. It is argued that the daily wage rate implicit in the annual wage of an attached labourer, determined probably on the basis of a notion of subsistence, operates as the norm for fixing the minimum daily wage of a casual labourer. This minimum wage need not, and usually does not, clear the market in casual labour. However, during certain busy periods, the casual labour market approaches a full-employment equilibrium, and the wage rate rises above the minimum level. Such a process has two important implications: (i) there arises a wage-gap, i.e. the actual wage rate tends to be higher than the expected wage income per unit of labour offered in the market;and (ii) an increase in the overall demand for labour does not necessarily lead to a higher wage rate.
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