The Indian Economic Journal, Ahead of Print.
The story of Punjab’s economic development witnessed an asymmetrical shift in the structure of output and employment due to the intensive capitalistic model of production in agriculture. The present study, based on National Sample Survey Office data, examines the patterns of employment and output in rural economy of Punjab during the pre-reform and post-reform period. Rural Punjab witnessed fall of work participation rate and phenomenon of ‘defeminisation’ of the labour force in agriculture during the post-reform period. There is a paradigm shift as the share of non-agriculture employment increased to 59.3% as per Periodic Labour Force Survey 2018; consequently, the non-agriculture sector becomes a major driving force in the state economy. An increase in employment elasticity among all sectors (except construction sector) during the post-reform period is a good sign. But a substantial decline in employment elasticity for all the sectors (except the construction sector) of Punjab is a disquieting phenomenon during the study period. Amidst the agrarian crisis, the rural non-farm sector can emerge as a silver lining, but evangelists of market economy disregarded the rural non-farm sector. Hence, the state should abdicate its neoliberal policies and adopt post-Washington consensus for the development of the rural non-farm sector within a given mode of production.JEL Codes: E24, J16, J43, J46, O11

The Indian Economic Journal, Ahead of Print.
The study analyses the debate around the ambiguous relationship between firm size and performance. We explore how productivity varies across firm sizes in the informal sector, where firm size is sensitive to formal regulations. Additionally, the study also looks into the informal firms’ quantity and quality of employment by observing wage and performance dispersion across firm sizes, thus indicating capital accumulation and exploitation. Considering the data limitations, a pseudo-panel data design was adopted by combining the three, only available, independent cross-sectional surveys by the National Sample Survey Office, spanning from 1999–2000 to 2015–2016. Potential issues such as time-invariant unobserved firm-level heterogeneity were accounted for by using panel random effects regression. Using total firm employment and total factor productivity as the primary measures of firm size and performance, we find a positive relationship between the two across all major industries. Our results stand robust against alternative firm size and performance measures. However, this positive association between size and performance indicated capital accumulation (increasing productivity with increasing size) at the expense of labour exploitation (stagnant wages across firm sizes). The obtained findings convey important policy implications for adopting a carrot-and-stick approach for the gradual formalisation of the economy.JEL Codes: D22, L25, O25