Poverty Nutrition Trap in Rural India
Australian National University (ANU) - Australia South Asia Research Centre (ASARC); Crawford School of Public Policy
University of Delhi - Department of Economics
Monash University - Centre for Health Economics
Australian National University Trade and Development Working Paper
The contribution of the present paper is threefold. First, we formally test whether the effect of calorie deprivation on wages is more significant/higher for the lower quantiles of workers. In the extant literature this is established through non-linear terms in the wage equation. A more satisfactory method of doing this is through quantile regressions. Second, the quantile regression approach helps us identify the exact group for which the poverty-nutrition trap holds. The extant literature is unable to establish whether there are systematic differences across different quintiles in the response of productivity/wages to nutrition. The present paper addresses this lacuna. Third, we are able to establish a critical wage level for which the PNT trap hypothesis holds. For wages higher than this the hypothesis does not hold. We then argue that this value of the wage rate should set a floor for any minimum wage for agricultural labourers.
Number of Pages in PDF File: 33
Keywords: Nutrition, calories, wages, poverty trap, labourers
JEL Classification: I12, I31, I32, J41working papers series
Date posted: April 5, 2005
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