Rural Labour in Transition: Real Wage Trends in India Since early 1980s

Abstract

This paper analyses the evolution of real wages among rural labour in India from 1983 to 2023–24, focusing on the bottom 40 percent of the rural population with respect to monthly per capita consumption expenditure. Using unit-level data from NSSO employment rounds and the PLFS, and deflating earnings by the CPIAL, the paper estimates comparable daily real wages for regular and casual workers. The findings show a broad long-run rise in real wages after the late 1980s, with stronger gains between the early 1990s and 2011–12 than in the subsequent period. Over time, the wage gap between regular and casual workers narrowed in many states, but this narrowing often coincided with declining labour-force participation, a rising out-of-labour-force population, and growing volatility in the post-2011 period. Gender disparities remained persistent, and state-level patterns were highly uneven. The findings suggest that rising real wages among those employed should not be treated as sufficient evidence of improving labour-market conditions. Instead, they need to be interpreted alongside wider changes in agrarian performance, labour-force participation, sectoral shifts and the distribution of employment opportunities.