Explain The Concept Of Expected Urban Rural Wage Differential.

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Explain The Concept Of Expected Urban Rural Wage Differential.

The expected urban-rural wage differential is the difference in wages earned by workers in urban and rural areas. This difference can be caused by a variety of factors, including differences in the cost of living, education levels, and the availability of jobs in urban and rural areas.

In India, the expected urban-rural wage differential is relatively high. A study by the Reserve Bank of India found that, on average, urban workers earned about 50-60% more than their rural counterparts. This difference is partly due to the fact that urban areas tend to have a higher cost of living than rural areas, as well as greater opportunities for higher-paying jobs.

One of the main factors contributing to the urban-rural wage differential in India is the lack of job opportunities in rural areas. Many rural areas in India lack the infrastructure and human capital necessary to attract industries and businesses. As a result, rural workers are often forced to accept lower-paying jobs or migrate to urban areas in search of better opportunities.

Another factor contributing to the urban-rural wage differential is the difference in education levels between urban and rural workers. Urban workers are more likely to have higher levels of education and specialized skills, which can lead to better-paying jobs. This is because, in urban areas, educational facilities and opportunities tend to be more accessible compared to rural areas.

The difference in availability and quality of public services such as healthcare, sanitation, electricity and communication also contributes to the urban-rural wage differential. Urban areas tend to have better access to public services, which can help to reduce the cost of living and increase productivity.

The Government of India has implemented various policies and schemes to address the urban-rural wage differential. Examples of such policies include the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which aims to provide rural households with at least 100 days of guaranteed wage employment per year, the Pradhan Mantri Awas Yojana (PMAY) for providing affordable housing for urban and rural poor, and the Pradhan Mantri Gram Sadak Yojana (PMGSY) for rural road connectivity.

These policies aim to provide rural households with greater access to jobs, better wages, and improved access to public services. However, their impact has been varied, and it is argued that the implementation of these policies has been constrained by a lack of resources, capacity, political will and corruption.

In conclusion, the urban-rural wage differential in India is relatively high and caused by a variety of factors such as the lack of job opportunities in rural areas, differences in education levels, and the difference in the availability and quality of public services. Government policies have been implemented to address this issue, but they have been constrained by a lack of resources, capacity, political will and corruption. To address this issue, more needs to be done to improve the rural economy and provide rural workers with greater access to jobs, better wages, and improved access to public services.

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