Wage Dynamics of Farm and Non-Farm Labour in Godavari Delta Zone of Andhra Pradesh, India: A Cointegration Analysis

Abstract

The present study was undertaken to analyse integration among wages of farm men, farm women, and non-farm labour in Godavari Delta Zone of Andhra Pradesh. Time series data on monthly average wages of farm and non-farm labour over a period of twenty years were used. The growth rate of farm men, farm women, and non-farm wages showed an increasing trend. The unit root test indicated that, the wage series became stationary after first differencing, and Johansen co-integration test confirmed the presence of a long-run relationship among the variables. The Vector error correction model revealed that, both men and women farm labour wages adjust to restore long-run equilibrium when short-run deviations occur. Whereas, non-farm wages showed divergence from equilibrium. Pairwise Granger causality results revealed a bidirectional causal relationship between farm men and farm women wages, while non-farm wages exhibit unidirectional causality toward both categories of farm wages. The findings of the study provide valuable insights for wage policy formulation, particularly in the context of agriculture and rural employment.