Labour Supply Behaviour of Agricultural Labourers at Different Wage Rates in Karnataka, India: An Economic Analysis

Abstract

This study investigates the labour supply behaviour of agricultural labourers at different wage rates. The objectives of this study are to test the Impact of rural development schemes on availability of agricultural labours supply and to observe agricultural labours responsiveness to changes in the wage rates by using 2013 cross-sectional data. Most of the agricultural labourers are landless and meager in land holding size, they mainly depends on employment in agriculture as a labour. Majority of the agricultural labours belongs to backward classes of the society. The reason for sub-optimal utilization of labour offerings was the provision of food in the public distribution system, which upsurges the food availability and security for a month with only one or two person days of labour offering. If agricultural labourers were foo d secure, then they have every reason to prefer leisure.  On the demand side, most farmers believe that the adoption of MGNREGA has reduced workforce availability, with migration of agricultural labour to other regions playing a larger role. Furthermore, in rural areas, due to higher pay in the non-agricultural sector, there appears to be a backward bending supply curve of labor at two levels.  The markedly backward-bending shape of the labour supply curve of working agricultural labour suggests that the income elasticity of demand for leisure is larger relative to the substitution effect for supply of labour by the agricultural labourers.