Wage responsiveness of labour supply and demand in nonclearing rural markets: the case of Indian agriculture

Studies considering the supply or demand for casual labour in isolation may be inappropriate in the context of Asian agriculture, as also simultaneous equations models that assume the labour market to clear. For it is an accepted stylized fact that rural labour markets do not clear. Formulating possibly the first disequilibrium model in the context of Indian agriculture we present more reliable estimates of the wage responsiveness of the supply and demand for labour from cultivator and landless households. These appear to contradict received evidence.