Sources of Output Growth in Indian Agriculture during the Post-Reform Period

Economic growth has failed to be sufficiently inclusive, particularly after the mid-nineties. Although agriculture is still a single major sector providing livelihood to more than 60 percent of the population, it has lost its growth momentum and the share has been declining continuously for a variety of reasons like low income due to inadequate output growth, low productivity, lack of credit at reasonable rates, natural calamities and unavailability of proper extension services. Realizing the importance of this sector and its current crisis, the Eleventh Plan aims to reverse this trend. Output growth could be possible by increasing input growth, technical progress and improvement in technical efficiency. In order to identify the source of the problem, this paper attempts to decompose the agricultural output growth obtained in 15 major states for the period 1994-95 to 2003-04 into the above three components using the random coefficients frontier production function model. Results of the study indicate that the efficiency has declined over time for all the states and the average technical efficiency is only 72 percent. This means that there is a potential to increase the existing output by 28 percent without increasing inputs.We found that inmost of the states, growth was only due to higher inputs. Investment in extension services along with sustained investment in agricultural research and development, and infrastructure is the need of the hour. West Bengal is the most efficient state in applying labor and fertilizer inputs and also has a very high over all efficiency. This can be linked to the successful land reform policies of the state.economic growth, technical efficiency, Eleventh Plan, frontier production function, land reform

Import Competition, Formalization, and the Role of Contract Labor

Does higher import competition increase formalization and aggregate productivity? Exploiting plausibly exogenous variation from Chinese imports, we provide empirical causal evidence that higher imports increases the share of formal manufacturing enterprise employment in India. This formal share increase is due to both the rise in formal-enterprise employment driven by high-productivity firms, and a fall in informal-enterprise employment. The labor reallocation is enabled by the formal firms’ hiring of contract workers, who do not carry stringent firing costs. Overall, Chinese import competition increased formal-sector employment share by 3.7 percentage points, and aggregate labor productivity by 2.87 percent, between the years 2000–2001 and 2005–2006

Import Competition, Formalization, and the Role of Contract Labor

Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide causal evidence that higher import competition increases the share of the formal enterprise employment. We find an increase in the level of formal enterprise employment, driven by the high productivity firms, and in contrast, a fall in the informal enterprise employment. This labor reallocation is enabled by contract workers, who do not carry stringent ring costs. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 4.1 percentage points between 2000 and 2005. We calculate the labor productivity gap between the formal and informal sector, adjusting for differences in prices and worker characteristics and find them to be salient in explaining the observed gap. Our preferred estimate of the productivity gap implies an increase in labor productivity by 3.19% in response to Chinese import competition

Hazards in the Wake of Climate Change Induced Extreme Weather Events and Their Impact on Indian Fisheries

Climate change, whether driven by natural or human forcing, can lead to changes in the likelihood of the occurrence or strength of extreme weather and climate events or both. In recent past, the increased occurrence of extreme climatic events has caused enormous damage t

Minimum Wage Effects at Different Enforcement Levels: Evidence from Employment Surveys in India

WP 2014-12 April 2014JEL Classification Codes: J30; J3