A FARM-LEVEL STUDY OF LABOR USE AND EFFICIENCY WAGES IN INDIAN AGRICULTURE

This paper develops a microeconometric model of farm behavior and exam ines labor allocation and productivity in an institutional setting whe re markets are noncompetitive, farms face external constraints in inpu t use decisions and prices, especially wages, may not be exogenously g iven. We use a farm-level data collected by Agro-Economic Research Cen ter, West Bengal, India for this purpose. The unique feature of the da taset is that it contains information on farm-specific inputs and outp uts as well as variables like education, off-farm income, regional loc ation of each farm, etc. The data comes from rural areas of West Benga l where noneconomic constraints are abundant. This gives us an opportu nity to test the presence of both efficiency wages and distortions.