Labour allocation by landless households in the rural Punjab [Pakistan]
2002
Ellahi, M. (Planning and Development Dept., Lahore (Pakistan)) | Mahboob, H.
Landless households are a considerable part of rural community, where household is the basic decision making unit for labour allocation. However, the use of household-based cross-sectional data lead to complexity in the estimation process due to partial observation of labour supply and wages. A common approach is to censor those observations where data are not available, but this leads to a sample selection problem. Punjab has a wide variation in resource-base, notably controlled irrigation, commercial and industrial activities and access to jobs, which affect wages, employment and labour allocation. Further, wages are not the only determinants, but also a variety of non-wage variables, such as education, demographic and regional attributes influence labour allocation. An attempt is made to spell out economic and econometric models for estimation. The basic parameters are used to derive labour supply elasticities for testing hypotheses and to interpret results on wage and non-wage variables. Results reveal that non farm wages have a predominant role in labour allocation and households prefer non farm work. The effect of education on labour supply for both types of jobs was negligible, while demographic variables had a considerable impact. The resource-base positively affected labour supply for both works, while access to cities facilitated workers to participate in non farm jobs and to withdraw labour from farm work.
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