Rural Growth and Distribution. Two Narratives from the PLFS 2017-2023

Jayadev, Arjun and Tripathi, Avinash M and Shravan, M K (2026) Rural Growth and Distribution. Two Narratives from the PLFS 2017-2023. Working Paper. Azim Premji University, Bengaluru.

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Abstract

This paper investigates a striking puzzle in recent rural India: individual real wages have shown weak or stagnant growth for large segments of the labour force, while household per-capita incomes have risen materially and, in many cases, faster among lower deciles. Using microdata from the Periodic Labor Force Survey (PLFS) 2017–2023, we document these contrasting patterns and reconcile them. First we undertake a simple decomposition that separates (i) average real wage per earner, (ii) the number of earners per household, and (iii) household size. Our empirical analysis shows that demographic and laboursupply adjustments—chiefly an increase in earners per household driven by rising labour force participation and expanded non-farm employment—account for the bulk of observed gains in household per-capita income even as individual real wages remain subdued. Distributional analysis reveals that percentage growth has been relatively progressive (lower deciles recording larger proportional gains), but absolute level gaps persist and, in many cases, widen. We further disaggregate decile income by occupational category and find that lower deciles have seen significant shifts from casual work to self-employed status. Since the latter category provides, on average, higher incomes, this can partially explain much of the observed progressivity of household income growth.

Item Type:	Monograph (Working Paper)
Authors:	Jayadev, Arjun and Tripathi, Avinash M and Shravan, M K
Document Language:	Language English
Subjects:	Social sciences > Social problems & services > Other social problems and services Social sciences > Social problems & services > Public health
Divisions:	Azim Premji University - Bengaluru > University Publications > Working Paper > CSIE working paper series
Full Text Status:	Public
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/6586
Publisher URL:	https://azimpremjiuniversity.edu.in/

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