Inequality,earnings and participation among the poor in rural India

Emphasising that there is a relative dimension to deprivation, an attempt is made here to decompose income inequality among the rural poor into inequality in earnings per worker, in participation rate and covariance of earnings per worker and participation rate. From this decomposition, the effects of (small) changes in inequality in earnings per worker and in participation rate on income inequality are evaluated. The analysis is based on a cross‐section of rural households in 1970–71. The samples of poor cultivating households and poor casual agricultural labour households are analysed separately for each of two regions, based on a classification of villages in terms of technological advancement.