The Consequences of the Agricultural Productivity Growth for Rural Landless Households: Findings from Research Based on the Indian Green Revolution Experience (The Iqbal Memorial Lecture)

There has been much debate over the extent to which economic growth reduces poverty and augments human development among the poor. This paper describes ongoing research using survey data on the Green Revolution experience in India that focuses on this issue. The research is based on a general-equilibrium model of labour markets for adults and children that differentiates households by whether they own land and incorporates a public sector that chooses the amount of school building. The empirical results suggest, consistent with the model, that expectations of improvements in agricultural productivity increase the schooling of children in landed households and reduce schooling in landless households, in part because of the operation of the child labour market, as landless child labour is used to replace landed child labour lost due to increased child school attendance in landed households. The results also show, however, that school construction in India was undertaken at higher levels in areas in which there were expectations of greater future productivity increases, and that the closer proximity of schools differentially benefited landless households. Thus school building policy in India tended to offset the adverse distributional consequences of agricultural technological change in the early stages of the Green Revolution. The allocation of schools, however, did not fully offset the incentives for landless households to reduce schooling investments. The perverse correlation between human development and income growth observed among the poor landless households in India at the initial stages of the Green Revolution, thus, was not due to lack of responsiveness of public resources but to the lack of a return to schooling in the non-farm sector.