Can colonial institutions explain differences in labour returns? Evidence from rural colonial India

Abstract

This paper studies the relationship between land revenue systems and returns to agricultural labour in colonial India. I provide the first district-level comparative estimates of agricultural labour returns relative to average income, on the basis of wage/income ratios for 1916. I then use those estimates to analyse the impact of the land revenue systems established by the British colonial authorities. Results show that districts with a larger proportion of non-landlord land revenue systems presented higher relative wages, closer to the average income. This effect was mainly driven by differences in land concentration connected to the type of landownership introduced by land revenue systems.