We model slack season wages in a village economy, in the presence of involuntary unemployment. Our model draws its inspiration from sociological notions of 'everyday peasant resistance'. In particular, labourers can react to employers who pay low slack wages by refusing to work for them in the relatively tight peak season. Such refusals, however, are not automatic and are modelled endogenously. A continuum of equilibrium wage configurations is obtained. These configurations, barring one, involve wages exceeding reservation wages, despite the presence of involuntary unemployment. Several qualitative observations follow. These are examined with respect to available empirical data, in particular, the village survey of Palanpur.
ASJC Scopus subject areas
- Economics and Econometrics