Value of skill in rural India

Earlier today I had blogged about wage rates for unskilled workers in rural India. Now, we will use the same dataset and see what premium people pay for skills. The same data gives wages for certain occupations – carpenters, masons, cobblers, blacksmiths, etc. There are also wages given for various types of farm labour, and for the purpose of this exercise I’ve used ploughing to be representative of farm labour.

The following plot shows the wage rates for different skills in different states. A note on how to read this graph. The x axis represents the state and the y axis represents the daily wage for that particular skill. The skill itself is represented in text form. So for example a carpenter in rural Kerala gets about Rs. 600 per day while a sweeper in Bihar gets about Rs. 100.

Source: Labour Bureau. Numbers for April 2013
Source: Labour Bureau. Numbers for April 2013
  • Notice that even skilled jobs in other states don’t fetch as much as an unskilled job in Kerala. Tamil Nadu and Punjab come closest
  • The skills most in demand in rural areas across states are carpentry and masonry, if you go by this data
  • In most states, cobblers earn lower than “unskilled workers”. This is interesting because there is skill involved in making and repairing shoes. The low wages for cobblers indicates a caste bias. It is also possible that since cobblers are mostly self-employed their wage rate is inaccurate
  • Blacksmiths are again not too highly valued in villages
  • The high numbers for Kerala could be a function of the state’s lower urban-rural divide compared to the rest of India. Kerala is generally described as a semi-urban continuum with no strongly delineated urban and rural areas. Rural workers could be expensive since they are in demand for urban jobs also, unlike in other states.



The same caveats that apply to the previous post apply to this. We don’t know the sample size or the accuracy of the survey. Nevertheless, some interesting insights come out.

Wage rates in rural India

The Labour Bureau, affiliated to the Union Ministry of Labour, does a monthly survey on wages in Rural India. Wages of men and women in select occupations are polled (data is collected by the NSSO) and published on the website of the labour bureau. In this post we will look at the average daily wages of unskilled male workers (as reported by this survey) in the 20 states for which it is published (your guess is as good as mine as to why it is not published for other states).

Source: Labour Bureau statistics
Source: Labour Bureau statistics

It is interesting to note that the daily wage of the average unskilled man in Kerala is almost five times that of the average unskilled man in either Gujarat or Madhya Pradesh (states that are at the bottom of the list). Some states known to be “progressive” such as Punjab, Haryana and Tamil Nadu are also towards the top of the list while other so-called “progressive” states such as Maharashtra, Karnataka and Gujarat are close to the bottom.

Like any other data put out by the government, this should be taken with some salt. First of all, the sample sizes is not mentioned. Secondly, only the average number is reported and no measure of dispersion is given. For example, it is hypothetically possible that in Kerala they interviewed ten workers, nine of whom received Rs. 100 and the tenth received Rs. 4000 leading to an average of Rs. 490! As a thumb rule, when you put out survey data, you should always include sample size and a measure of variation (such as the standard deviation), else it is hard to conclude anything from the data.