Structure of the rural labour market: An investigation into two villages in West Godavari district, Andhra Pradesh

Abstract

The present article starts with a normative assumption that a well-formed labour market is a necessary condition for the development of a less developed economy. A well-formed labour market implies the separation of agricultural households into labour-demanding and labour-supplying households. This separation facilitates self-correction of the labour market through adjustment in wages. In the context of incompletely formed labour markets, the self-corrective mechanism in the labour market is also realised through non-labour market institutions like the land lease market. These resource adjustment mechanisms are illustrated through the study of choices available and actual alternatives realised by labour-supplying and labour-demanding households in two villages of West Godavari district in Andhra Pradesh. Although these two villages have different structures, non-labour market institutions play an important role in resource adjustment here.