Real Wage Determination in Bangladesh Agriculture: An Econometric Investigation.

Applied Economics (Impact Factor: 0.46). 02/1990; 22(11):1549-65. DOI: 10.1080/00036849000000123
Source: RePEc


Thsi paper develops and estimates a real wage model for the agricultural sector in Bangladesh for the period 1973:2–1985:4. The model is developed within the framework of the market theory of labour demand and labour supply. The empirical results are supportive of the market theory of wages.

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    • "Boro rice and aus rice compete with each other for the same cultivable land. The commonly practiced cropping pattern for the peasants in Bangladesh is aman rice in the rainy season, followed by boro or aus or jute in the dry season (Hossain 1990, Datta 1998, BBS 2002). In 2000, 75 percent of the total cultivable area in Bangladesh was under rice production and 2.86 per cent was under jute production. "
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    ABSTRACT: ABSTRACT This paper examines the effect of group-based credit for the poor in Bangladesh, by gender of participant, on participatinghousehold’s mix of agricultural contracts (quantities of land sharecropped and rented), and the supply of agricultural labor which takes the form of own- cultivation as opposed to agricultural wage labor. The group-based micro-credit programs examined,provide production credit for nonagricultural activities to essentially landless and assetless rural households. Landless cultivators are more likely to have their contractual choices shaped by credit market constraints than others. On a priorigrounds,it is important to distinguish credit effects by the gender of participant. Male program credit, if properly monitored, should induce men to substitute away from supplying agricultural labor and contracting for agricultural land to supplying the nonagricultural labor required by the nonagricultural self-employment activity financed by the micro-credit program. Program participation by women, who are otherwise much less involved in income-generating activities, diversifies the sources of household income not merely by the type of activity undertaken but also across individuals within the household, outcomes that permit households to choose higher return but riskier agricultural contracts. Econometric analysis of a 1991/92 household survey provides strong evidence that participation in these group-based micro-credit programs substantially alters the mix of agricultural contracts chosen by participatinghouseholds. In particular, both female and male participation induce a significant increase in own-cultivation through sharecropping, coupled with a complementary increase in male hours in field crop self-employment and a reduction in male hours in the wage agricultural labor market, consistent with its presumed effects in diversifying income and smoothing,consumption. Female,credit effects are larger than male credit effects in increasing sharecropping and in reducing male wage labor and increasing agricultural self-employment,as predicted.
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