Employment and wage disparities between rural and urban areas
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Ananian, Sévane; Dellaferrera, Giulia Working Paper Employment and wage disparities between rural and urban areas ILO Working Paper, No. 107 Provided in Cooperation with: International Labour Organization (ILO), Geneva Suggested Citation: Ananian, Sévane; Dellaferrera, Giulia (2024) : Employment and wage disparities between rural and urban areas, ILO Working Paper, No. 107, ISBN 978-92-2-040443-0, International Labour Organization (ILO), Geneva, https://doi.org/10.54394/LNZT9066 This Version is available at: https://hdl.handle.net/10419/283544 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/
XEmployment and wage disparities between rural and urban areas Authors / Sévane Ananian, Giulia Dellaferrera February / 2024 ILO Working Paper 107
Copyright © International Labour Organization 2024 This is an open access work distributed under the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/). Users can reuse, share, adapt and build upon the original work, as detailed in the License. The ILO must be clearly credited as the owner of the original work. The use of the emblem of the ILO is not permitted in connection with users’ work. Attribution – The work must be cited as follows: Ananian, S., Dellaferrera, G. Employment and wage disparities between rural and urban areas. ILO Working Paper 107. Geneva: International Labour Office, 2024. Translations – In case of a translation of this work, the following disclaimer must be added along with the attribution: This translation was not created by the International Labour Organization (ILO) and should not be considered an official ILO translation. The ILO is not responsible for the content or accuracy of this translation. Adaptations – In case of an adaptation of this work, the following disclaimer must be added along with the attribution: This is an adaptation of an original work by the International Labour Organization (ILO). Responsibility for the views and opinions expressed in the adaptation rests solely with the author or authors of the adaptation and are not endorsed by the ILO. This CC license does not apply to non-ILO copyright materials included in this publication. If the material is attributed to a third party, the user of such material is solely responsible for clearing the rights with the right holder. Any dispute arising under this license that cannot be settled amicably shall be referred to arbitration in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). The parties shall be bound by any arbitration award rendered as a result of such arbitration as the final adjudication of such a dispute. All queries on rights and licensing should be addressed to the ILO Publishing Unit (Rights and Licensing), 1211 Geneva 22, Switzerland, or by email to [email protected]g. ISBN 9789220404423 (print), ISBN 9789220404430 (web PDF), ISBN 9789220404447 (epub), ISBN 9789220404454 (mobi), ISBN 9789220404461 (html). ISSN 2708-3438 (print), ISSN 2708-3446 (digital) https://doi.org/10.54394/LNZT9066 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the ILO of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the ILO, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval.
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01 ILO Working Paper 107 Abstract Statistical evidence from 58 countries shows that although people in rural areas are more likely to be in employment than those in urban ones, they also tend to have jobs that can put them at risk of experiencing inadequate labour protection as well as low pay. In particular, rural workers are paid, on average, 24 per cent less than their urban counterparts on an hourly basis, and only half of this gap can be explained by rural–urban discrepancies in education, job experience and occupational category. Developing countries exhibit a relatively wider gap, with the unexplained part also being larger. Furthermore, in many countries, certain groups of rural workers are at greater disadvantage, such as women, who, on average, appear to earn less than men in rural areas. However, institutional and regulatory frameworks, notably those that set minimum wages or seek to promote equal opportunities, can help to reduce labour market-related inequalities across the rural–urban divide. About the authors Sévane Ananian Sévane Ananian joined the Research Department of the International Labour Organization (ILO) in September 2021. His fields of studies include inequalities and wage setting institutions. He previously worked as a wage specialist based at the ILO Cairo office, where he provided support on wage policies to African countries. Formerly, he served as an economist at the statistical service of the French ministry of labour (DARES) and as a rapporteur for the French minimum wage expert group. Giulia Dellaferrera Giulia Dellaferrera joined the Research Department of the ILO in August 2023, where she focuses on work-related discrimination, inequalities, violence and harassment, as well as occupational safety and health. Previously, she worked on forced displacement at UNHCR Protection Unit for Belgium and Luxembourg, and as a legal associate at ICRC Regional Delegation in Paris and Genocide Watch. She is specialised in human rights and international humanitarian law.
02 ILO Working Paper 107 Abstract 01 About the authors 01 Acronyms 07 XIntroduction 08 X1 Dataanddefinitions 10 A sample of household surveys from 58 countries 10 Nationaldefinitionsofurbanandruralareas 11 X2 Employment in rural and urban areas 12 Amethodologyforanalysingthedifferencesinlabourmarketoutcomesbetweenruraland urbanareaswhileaccountingforthecharacteristicsofpopulations 12 Evenaftercontrollingforageandeducation,livinginaruralareaincreasesthelikelihoodof employment across all country income groups 13 Workersinruralareasaremorelikelytobeself-employed 14 X3 Wages in rural and urban areas 19 Higherproportionoflowpaidworkersinruralareas 19 Ruralemployeestendtohavelowereducationalattainmentandlessexperiencethanurban employees, especially in developing countries 20 Aspecificoccupationalprofileofruralemployees 21 Ruralemployeesearnonaverage24percentlessthanurbanemployees,withhalfofthat gapexplainablebydifferencesintermsofeducation,experienceandoccupation 23 On average, rural female employees earn less than their male counterparts 27 Rural–urbanpaygapandminimumwages 28 X4 Legalframeworksfortacklingrural–urbanimbalancesinemployment andwages 32 The role of international labour standards 32 International labour standards on equality and the elimination of discrimination in respect of employment and occupation 33 Internationallabourstandardsonminimumwagesandwage-setting 34 Otherinternationallabourstandardsdealingwithwages 36 National practices related to inequalities in rural areas 37 India’s National Rural Employment Guarantee Schemes: The impact of rural public works on agricultural wages 37 Table of contents
03 ILO Working Paper 107 Austrian legislation on gender equality in rural areas 38 XConclusions 40 Appendix 41 References 47 Acknowledgements 52
04 ILO Working Paper 107 List of Figures Figure1.Shareofwomenamongemployees,bycountryincomegroup,2019orlatestavailable year (percentage) 15 Figure2.Shareofwomenamongself-employedworkers,bycountryincomegroup,2019or latest available year (percentage) 15 FigureB.2.1Distributionofselfemployedworkersinruralandurbanareasaccordingto theirnumberofhoursworked,bycountryincomegroup,2019orlatestavailableyear (percentage) 17 Figure B.2.2 Distribution of employees in rural and urban areas according to their number of hoursworked,bycountryincomegroup,2019orlatestavailableyear(percentage) 17 Figure B.2.3. Share of temporary contratcts in rural and urban areas, by country income group,2019orlatestavailableyear(percentage) 18 Figure3.Shareofruralemployeesineachquintileofthewagedistribution,bycountryincomegroup,2019orlatestavailableyear(percentage) 20 Figure4.Shareoflow-paidworkersamongruralandurbanemployees,bycountryincome group,2019orlatestavailableyear(percentage) 20 Figure 5. Distribution of rural and urban employees according to their educational level, by countryincomegroup,2019orlatestavailableyear(percentage) 21 Figure 6. Distribution of rural and urban employees according to their age group, by country incomegroup,2019orlatestavailableyear(percentage) 21 Figure 7. Distribution of occupations among rural and urban employees, by country income group,2019orlatestavailableyear(percentage) 22 Figure8.Averagepaygapbetweenruralandurbanemployees,bycountry,decomposed, 2019orlatestavailableyear(percentage) 25 Figure9.Genderpaygapinruralandurbanareas,bycountryincomegroup,2019orlatest available year (percentage) 27 Figure10.Averagewagegapbetweenruralandurbanworkers,incountrieswithaspecific minimumwagefortheagriculturalsector,2019orlatestavailableyear(percentage) 29 FigureB.5.1.Shareofruralself-employedworkersineachquintileofthedistributionofincomefromemployment,2019(percentage) 30 FigureB.5.2.Averaageemploymentincomegapsbetweenruralandurbanself-employed workers,decomposed,2019(percentage) 30 FigureB.5.3.Genderemploymentincomegapamongruralandurbanself-employedworkers,2019,(percentage) 31 FigureA1.Shareofworking-agepopulationlivinginruralareasinthesampledcountries, 2019orlatestavailableyear(percentage). 41 FigureA2.Shareoflow-paidemployeesinruralareasinthesampledcountries,2019orlatest available year (percentage) 42 Figure A3. Distribution of male and female rural employees according to their level of educationincountrieswithanegativeruralgenderpaygap,2019orlatestavailableyear (percentage) 43
05 ILO Working Paper 107 List of Tables Table1.Effectoflivinginaruralareaontheprobabilityoflabourforceparticipation,unemploymentandwageemployment(percentagepoints) 14 TableA1.Nationaldatasourcesusedtoanalyseruralandurbanemploymentandwages 43
12 ILO Working Paper 107 X2 Employment in rural and urban areas A methodology for analysing the differences in labour market outcomes between rural and urban areas while accounting for the characteristics of populations The labour market outcomes observed for people living in rural and urban areas may differ partly because of discrepancies in socio-demographic characteristics between these two populations. Indeed, surveys or censuses available for a range of countries suggest noticeable differences in educational attainment between urban and rural populations (Population Reference Bureau 2015; United States Census Bureau 2016). If such characteristics are associated with specific labour market outcomes, rural–urban disparities are also likely to be found in the latter.10 In that regard, taking into account the differences in observed socio‑demographic characteristics is a key step in the analysis of rural–urban disparities in labour market outcomes such as labour force participation, unemployment and status in employment (wage employment vs. self-employ- ment). To allow for the different compositions of rural and urban populations, the econometric technique of logistic regression is applied to a data set constructed from the pooled country surveys selected for the analysis (see box 1 for further details of the technique). This methodology makes it possible to assess how the probabilities of the labour market outcomes under study are affected by living in a rural area, while at the same time disentangling this impact from that of other observed characteristics, such as education and age. XBox1.Estimatingtheeffectoflivinginaruralareaontheprobabilityofselectedlabourmarketoutcomes To gauge the effect of living in a rural area on the probability of labour force participation, unemployment and wage employment, a logistic regression model is estimated separately for men and women in a pooled data set including all the sampled surveys (See table A1 in the appendix). This econometric approach involves estimating the parameters α, γ, and β in the following equation: PY e ()= 1 1+ 1 αγRurXβ−( ++) where P(Y) is the probability that Y happens, with Y referring, variously, to labour force participation, unemployment and being an employee (vs. being self-employed). In addition, in equation (1), α is a constant, Rur is a dummy indicating whether the person surveyed is in a rural or urban area, and X denotes a set of control variables. For labour market participation and unemployment, the control variables are the educational attainment (lower‑secondary school level or below; upper‑secondary school; above 10 Various factors may explain the discrepancies in educational attainment often observed between rural and urban areas, such as the need for rural students to move away from home to pursue a post-secondary education since relevant educational institutions are rare in rural areas; or rural job markets being mainly characterized by sectors (such as agriculture or manufacturing) that do not require higher education credentials (see Weiss and Heinz-Fischer 2022 for the state of research on the education of young adults in rural areas). In addition, a recent study has pointed to how disadvantageous natural physical and social environments (such as the cultural attitudes of parents) can lead to low levels of educational attainment in some areas (Xiang and Stillwell 2023).
13 ILO Working Paper 107 secondary school), the age group (15–24 years, 25–55 years and 55+ years) and a country dummy to allow for country‑fixed effects. When estimating the probability of wage employment, the control variables also include the respondent’s occupation according to the International Standard Classification of Occupations (ISCO‑08), with the major groups aggregated into six categories (“Managers, professionals and technicians”, “Clerical support, service and sales workers”, “Skilled agricultural, forestry, fishery, craft and related trades workers”, “Plant and machine operators, and assemblers”, “Elementary occupations” and “Armed forces occupations”). This makes it possible to control for possible differences in status in employment that could derive from workers’ occupations. Based on this estimation, the results reported in table 1 are computed (called “average marginal effects”). They correspond to the increase (or decrease) in the probability of the event Y (that is, labour force participation, unemployment or wage employment) induced by the event “Rur = 1” (residence in a rural area). Even after controlling for age and education, living in a rural area increases the likelihood of employment across all country income groups Living in a rural area has a positive impact on the likelihood of labour market participation. On average across countries, residence in a rural area increases the likelihood of participation in the labour market by 5 percentage points for both men and women (table 1). The impact of the area of residence is significant at each level of development except for women in high‑income countries. In these countries, women do not appear to participate in the labour market to a greater extent when they live in a rural area, all other observed characteristics being equal. Furthermore, among labour market participants, living in a rural area reduces the likelihood of being unemployed for both men and women. Depending on the country income group considered, the likelihood of being unemployed is reduced by 2 to 4 percentage points in the event of living in a rural area. Like the estimates related to labour market participation, these results are likely to reflect the overall income gap between rural and urban areas and the greater incentives for rural inhabitants to take up any job so as to improve their material situation (including when controlling for education and age). This pressure on rural inhabitants may be compounded by the challenges of job searching in remote areas, such as infrequent transport and lack of employment services. 11 11 By definition, a person of working age is unemployed if he or she was (a) without work during the reference period, that is, was not in paid employment or self‑employment; (b) currently available for work, that is, was available for paid employment or self‑employment during the reference period; and (c) seeking work, that is, had taken specific steps in a specified recent period to seek paid employment or self-employment.
14 ILO Working Paper 107 XTable1.Effectoflivinginaruralareaontheprobabilityoflabourforceparticipation,unemploymentand wageemployment(percentagepoints) All countries High-income countries Upper-middle- income countries Lower-middle- income countries Low-income countries Labour force participation Men 5.3*** 3.9*** 6.3*** 5.4*** 3*** Women 4.7*** 0.1 5*** 4.8*** 4.2*** Unemployment Men –3.1*** –2.6*** –4.3*** –2.6*** –2.5*** Women –3.7*** –2.4*** –4.4*** –2.9*** –4.2*** Wageemployment(vs.self-employment) Men –12.6*** –9.4*** –11.9*** –12.8*** –12.8*** Women –10.5*** –7*** –13.8*** –10.5*** –8.7*** Note 1: *** Indicates that the result is statistically different from 0, at a significance level of 1 per cent. Note 2: The results for labour force participation refer to the whole working-age population. Those for unemployment are estimated for the population in the labour force. Those for status in employment (wage employment vs. self-employment) are estimated for the employed population. Note 3: Labour force participation and unemployment models control for age and education. The status-in-employment model (wage employment vs. self-employment), features occupational category as an additional control. Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details. Workers in rural areas are more likely to be self-employed The third set of results from the econometric models estimated here suggests that workers’ status in employment is substantially affected by their area of residence, even after controlling for education, age and occupational category. Indeed, on average across countries, living in a rural area reduces the likelihood of being an employee by 13 and 11 percentage points for men and women, respectively.12 This effect is also significant in high‑income countries, though the magnitude appears to be slightly lower compared with countries at other levels of development (9 and 7 percentage points for men and women, respectively). The higher likelihood of rural workers being self-employed can be a cause of concern if no adequate framework is in place to ensure that such workers are covered by labour law and social protection. Self-employment has indeed been found to be the status in employment associated with the highest share of informality (ILO 2018b). In particular, the social protection coverage of self-employed workers still lags behind that of employees in many countries (ILO and OECD 2020; ILO 2021a). This confirms how special attention should be paid to extending labour protections to all workers in rural areas. Finally, although the effects of living in a rural area on the various labour market outcomes reported in table 1 are in most cases relatively similar for women and men, gender-related rural–urban 12 In this paper, status in status in employment is based on the classification adopted by the 15th International Conference of Labour Statisticians (ICLS) in January 1993, namely the International Classification of Status in Employment, 1993 (ICSE‑93). However, the 20th ICLS in October 2018 adopted a resolution that includes a new classification (ICSE‑18) aimed at reflecting the increasing uncertainty regarding the boundary between self-employment, paid employment and non-standard forms of employment, such as “dependent” contractors and short-term and zero-hour contracts (ILO 2023a). ICSE-18 is structured around the two categories of “independent” and “dependent” workers, with the latter including employees.
15 ILO Working Paper 107 discrepancies are visible when one looks at the raw shares of women in employment. Specifically, on average across the countries studied, women represent only 32 per cent of employees in rural areas, compared with 38 per cent in urban areas (see figure 1). Beyond the specific impact of living in a rural area on women’s labour market outcomes, gender imbalances in rural employment also result from the socio-demographic characteristics of the rural female population and their effects on these outcomes. XFigure1.Shareofwomenamongemployees,by countryincomegroup,2019orlatestavailable year (percentage) XFigure2.Shareofwomenamongself-em- ployedworkers,bycountryincomegroup, 2019orlatestavailableyear(percentage) Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details. Alongside differences in the likelihood of employment, jobs in rural and urban areas also differ noticeably in terms of working time. In that regard, a descriptive assessment is provided in box 2. Especially in developing countries, the number of working hours of the self-employed tends to be lower in rural areas than in urban ones. On another note, rural employees are more exposed to temporary contractual arrangements than their urban counterparts. XBox2.Workingtimeinruralandurbanareas Workingbeyond48hoursaweekismorecommoninurbanareasthatinruralones, especiallyamongtheself-employed Too few or irregular working hours may expose individuals to specific risks, such as insufficient income. On the other hand, excessive working hours are associated with health risks, including ischaemic heart disease and stroke (Pega et al. 2021). An overview of working time in rural and urban areas is therefore provided here, based on a subsample of countries with available information for both the self-employed and employees. Among the self-employed, a smaller proportion in rural areas work more than 48 hours per week compared with urban areas (figure B.2.1). On average across countries, 28 per cent of self-employed workers in rural areas work more than 48 hours per week, whereas this is the case of just 38 per cent of such workers in urban areas. On the other hand, a higher share of self-employed workers in rural areas work fewer than 20 hours per week, especially in developing countries (3 to 4 percentage points higher, depending on the country income group). Among urban self-employed workers, the share of those who work long hours – more than 55 hours per week – is particularly high (between 22 and 27 per cent). As a result, in developing countries, the median working time of self-employed workers is lower in rural areas. On average, across middle- and low-income countries, the median working time of the self-employed is 40 hours per week in rural areas, compared with 46
16 ILO Working Paper 107 hours in urban ones. In high-income countries the gap is considerably smaller (41 and 40 hours per week in rural and urban areas, respectively). In contrast, employees’ working hours are homogeneous across rural and urban areas in the selected countries considered here, except in the low-income ones. Regardless of whether they live in a rural or urban area, around one in ten employees in high-income countries works more than 48 hours, whereas this is the case of one in four and one in three workers in upper‑ and lower‑middle‑income countries, respectively (figure B.2.2). The homogeneity of the working hours of employees across urban and rural areas can be explained by the fact that workers in this category are covered by labour rights to a relatively greater extent and are less likely to be informal. Across the low-income countries in the sample, however, the share of employees working more than 55 hours is on average substantially higher in rural areas than in urban ones. In addition, the exposure of employees to long working hours seems to be linked to a country’s level of development. Specifically, wage employment appears to be more protected against long hours in high-income countries, where fewer than 5 per cent of employees work more than 55 hours.
17 ILO Working Paper 107 XFigure B.2.1 Distribution of self employed workersinruralandurbanareasaccording totheirnumberofhoursworked,bycountryincomegroup,2019orlatestavailable year (percentage) XFigure B.2.2 Distribution of employees in rural and urban areas according to their numberofhoursworked,bycountryincomegroup,2019orlatestavailableyear (percentage) Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year, and drawing on a subsample of 52 countries with information on the working hours of both self-employed workers and employees. See table A1 in the appendix for more details. Temporaryemploymentismorewidespreadinruralareas Although in most countries employees in rural areas have similar working hours to those living in cities, their contractual arrangements appear to be more precarious. On average, across a subsample of 34 countries with available information on workers’ type of contract, 43 per cent of employees in rural areas have a temporary contract, which is 8 percentage points more than in urban areas (figure B.2.3). The more frequent use of temporary contracts in rural areas can be observed in countries at every level of development and may be explained in part by the seasonality of work in agriculture and associated sectors. Overall, the share of temporary workers among employees in both rural and urban areas tends to be higher in developing countries, where informal work is more widespread in connection with precarious employment such as casual work (ILO 2016a). Without an appropriate legal framework, temporary employment can be a source of insecurity and put people at a disadvantage in the labour market, especially in times of economic slowdown.
18 ILO Working Paper 107 XFigureB.2.3.Shareoftemporarycontratctsinruralandurbanareas,bycountryincomegroup,2019or latest available year (percentage) Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year, and drawing on a subsample of 34 countries with information on temporary contracts. See table A1 in the appendix for more details.
19 ILO Working Paper 107 X3 Wages in rural and urban areas We now turn to the analysis of the employment income, as this labour market outcome is crucial for the working conditions and livelihoods of workers. The analysis focuses on the wages of employees – a decision guided by data-related considerations, since few labour force and household surveys collect reliable information on income from self-employment. Nonetheless, an analysis of rural and urban income from self-employment is undertaken at the end of the section for two countries whose surveys include reliable information in that respect (box 5). Those two examples illustrate that rural and urban incomes from self-employment exhibit similar patterns to those observed for wages. Higher proportion of low paid workers in rural areas Rural employees’ earnings are to be found near the first rungs of their countries’ wage ladder. Indeed, on average across the sample, 49 per cent of rural employees earn a wage that is below the second quintile of the wages in their country, meaning that their hourly wage was less than the wages earned by 60 per cent of all employees in both urban and rural areas (figure 3). The share of rural workers at the bottom of the wage distribution is slightly larger in high- and upper-middle-income countries, where 52 per cent of such workers earn below the second quintile of the wage distribution, compared with 48 per cent in lower-middle- and low-income countries.13 The concentration of rural workers in the lower tail of the wage distribution particularly exposes them to low pay, a relative measure indicating a wage below two thirds of the country’s median hourly wage.14 Across the sampled countries, on average 33 per cent of employees in rural areas are low‑paid, compared with just 21 per cent of urban employees (figure 4). In addition, this pattern is independent of the level of development, as the share of low-paid employees is higher in rural areas than urban ones for each country income group. Among the countries in the sample, the share of rural low-paid employees is the highest in Honduras and Namibia, reaching 56 per cent in both countries. These two countries also have the widest rural–urban gap in terms of low-paid employees, as only 22 per cent and 28 per cent, respectively, of their employees in urban areas fall into that category (see figure A2 in the appendix). At the other end of the spectrum, the share of low-paid rural employees is the lowest in Jordan (10 per cent). 13 The distribution of rural and urban wages presented here does not take into account the difference in local prices between rural and urban areas. In terms of purchasing power at the local level, the rural and urban distributions may therefore be different from those presented in figures 3 and 4 (see further down for a discussion of the price differential between rural and urban areas). 14 Low pay was statistically defined in ILO (2012).
20 ILO Working Paper 107 XFigure 3. Share of rural employees in each quintileofthewagedistribution,bycountryincomegroup,2019orlatestavailableyear(percentage) XFigure4.Shareoflow-paidworkersamongrural and urban employees, by country income group,2019orlatestavailableyear(percentage) Note: An employee is considered to be low-paid if he or she is paid less than two thirds of the median hourly wage in the country in question. Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details. Despite a higher concentration of rural employees at the lowest end of the wage distribution in high- and upper-middle-income countries, the share of low-paid employees in these country income groups is smaller than in lower-middle- and low-income countries (respectively, 15 and 17 per cent, compared with 22 and 27 per cent). Several factors may contribute to a reduction in the number of low-paid workers, including the existence of wage-setting institutions. In particular, minimum wage systems help to reduce the number of workers receiving a wage below a certain threshold and decrease wage inequality. Their ability to do so depends on the system parameters, notably their legal coverage and level of compliance, the level at which minimum wages are set, the structure of a country’s labour market and the characteristics of the beneficiaries (ILO 2020b). There may be specific challenges in the implementation of minimum wages in rural areas: for instance, non-compliance with the minimum wage has in many cases been found to be more widespread in such areas (ILO 2016b). Rural employees tend to have lower educational attainment and less experience than urban employees, especially in developing countries The lower wages of rural employees could partly be explained by specific characteristics of this group, especially if these are associated with lower labour productivity. For instance, education and job experience have an impact on wages, which could widen the wage gap between urban and rural workers if it is found that the latter are less experienced or have lower educational attainment. Across the countries in the sample, rural employees appear to have lower levels of educational attainment than their urban counterparts. Specifically, on average 59 per cent of rural employees have yet to attain the equivalent of a lower-secondary education, whereas this is the case for only 41 per cent of urban employees (figure 5). The discrepancy between urban and rural areas is substantial within each country income group studied, ranging from an average of 11 percentage points in high-income countries to 21 percentage points in upper-middle-income countries (18 percentage points in low- and lower-middle-income countries). In addition, especially in developing countries, the share of young workers among employees is higher in rural areas than in urban ones. The proportion of rural employees aged between 15 and 24 years is 27 per cent in low-income countries and, respectively, 22 and 27 per cent in
21 ILO Working Paper 107 lower-middle- and upper-middle-income countries, which is 5 percentage points higher than in urban areas for each country income group (figure 6). If we consider age to be a proxy for job experience, this finding suggests that rural employees are less experienced in developing countries. XFigure 5. Distribution of rural and urban employees according to their educational level, by countryincomegroup,2019orlatestavailableyear (percentage) XFigure 6. Distribution of rural and urban employees according to their age group, by countryincomegroup,2019orlatestavailable year (percentage) Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details. A specific occupational profile of rural employees As one would expect, rural wage employment tends to be concentrated in specific occupations, reflecting in part the share of agricultural activities in the rural economy (figure 7). Indeed, the proportion of skilled agricultural and trade workers among employees tends to be higher in rural areas (22 per cent on average across countries, versus 15 per cent in urban areas), and the same is true of elementary occupations (29 versus 17 per cent). In contrast, managers, professionals and technicians, along with clerical, service and sales workers, account for relatively fewer employees in rural areas (respectively, 21 and 18 per cent versus 31 and 27 per cent in urban areas).
28 ILO Working Paper 107 higher intellectual professions than in other occupational categories (three times greater than among clerks). A shortcoming of statistics on the gender pay gap is that they do not reflect possible gender differences in the performance of unpaid work, including those forms of work that may be prevalent in rural areas. For instance, unpaid work in family agricultural enterprises was found to account for 34 and 85 per cent of women’s informal employment in India and Egypt, respectively, compared with 11 and 10 per cent of men’s informal employment (FAO, IFAD and ILO 2010). In urban areas, other forms of unpaid work are also more likely to be performed mainly by women.18 Rural–urban pay gap and minimum wages Labour institutions such as minimum wages can reduce inequalities between groups of workers, including along the rural–urban divide. Besides, the available evidence shows that rural workers are over-represented among minimum wage and sub-minimum wage earners, highlighting the potential of wage policies designed to target rural areas (ILO 2020b). Minimum wages exist in over 90 per cent of ILO Member States, either statutory minimum wages (84 per cent of countries) or negotiated ones (6 per cent).19 However, within countries, minimum wage systems do not always cover the population of workers evenly, especially those based in rural areas. In particular, an estimated 18 per cent of countries with a statutory minimum wage exclude agricultural workers, domestic workers or both categories (ILO 2020b). Specifically, Bangladesh, the Plurinational State of Bolivia, Cambodia, Cyprus, Jordan, Lebanon, Pakistan, Samoa, the Sudan, the Syrian Arab Republic, Timor-Leste and the United States exclude all or some agricultural workers from their minimum wage system. Furthermore, minimum wage systems sometimes provide for specific rates for the rural population. In a few countries, agricultural workers are thus covered by a rate that may differ from the rates set for other industries.20 Among the countries in our sample, this is the case of Côte d’Ivoire, El Salvador, Guatemala, Honduras, Madagascar, Mali, Nicaragua, Senegal and Togo. Two thirds of these countries have a rural–urban pay gap that is larger than the average rural–urban pay gap observed within the country income group to which they belong, which indicates that countries with a specific agricultural minimum wage rate are often those with a relatively wide rural–urban pay gap (figure 10). 18 In India, for example, the participation of women in unpaid domestic work appears to be high in urban areas compared with rural ones (Singh and Pattanaik 2020). 19 Statutory minimum wages are set by governments, while negotiated minimum wages result from a collective bargaining agreement between employers’ and workers’ organizations that is made legally binding. 20 In addition, the payroll period for the minimum wage rate in the agricultural sector can differ from that in other industries. For instance, the agricultural minimum wage in Morocco (Salaire minimum agricole garanti) is set at a daily rate, whereas the minimum wage for the other sectors of activity (Salaire minimum interprofessionnel garanti) is set at an hourly rate.
29 ILO Working Paper 107 XFigure10.Averagewagegapbetweenruralandurbanworkers,incountrieswithaspecificminimumwage fortheagriculturalsector,2019orlatestavailableyear(percentage) Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details. In addition to statutory minimum wages, minimum wages set through collective bargaining may also be instrumental in addressing the low remuneration of rural workers. However, deficits in employer and worker representation in rural areas impede the promotion of social dialogue and collective bargaining. A recent investigation based on qualitative case studies covering 16 sectors of activity in 15 countries drew attention to the fact that, in many sectors, trade unions are either non‑existent or face major barriers in accessing workers’ organizations (ILO 2022a). Furthermore, women and informal, casual, seasonal and temporary workers were identified as groups of particular concern when it comes to representation. Beyond collective bargaining, improving the representation of rural workers would also be likely to help them in voicing their specific concerns in tripartite discussions on statutory minimum wages. XBox5.Employmentincomesfromself-employmentinruralandurbanareasinAngolaandBrazil In Angola and Brazil, the quality of the survey data allows one to compare the hourly employment incomes earned by self-employed workers in rural and urban areas. Although the findings presented in this box may not hold for all countries, they are illustrative of the rural–urban gap in income from self-employment that can be observed around the world. In both countries, self-employed workers’ incomes in rural areas are located towards the bottom of the distribution of income from self-employment. In Angola, 46 per cent of the rural self-employed earn hourly incomes that are below the second quintile of the distribution of labour income in the whole country, while that share reaches 65 per cent in Brazil (figure B.5.1). This indicates that, in contrast, urban self‑employed workers tend to earn incomes that are located at the upper end of the distribution of income from self-employment.
30 ILO Working Paper 107 XFigureB.5.1.Shareofruralself-employedworkersineachquintileofthedistributionofincomefrom employment,2019(percentage) Note: For each country, the quintiles of the distribution of hourly income from employment are estimated for the whole population of self-employed (that is, rural and urban self-employed workers). Source: Analysis based on ILO harmonized Microdata collection (ILOSTAT), 2019. See appendix for more details. As highlighted for wages, the rural–urban gaps in incomes from self-employment could be partly explained by differences in the endowments of rural and urban workers in terms of human capital. To allow for these differences, a Blinder–Oaxaca methodology similar to the one used for wages (box 3) is applied here. In the two countries, nearly half the rural–urban gap in income from self-employment is due to differences between rural and urban workers in terms of human capital and occupations held. Indeed, in Angola, a rural self-employed worker earns, on average, 42 per cent less than an urban one, of which 20 percentage points are explained by the age, education and occupation structures of the rural population (figure B.5.2). In Brazil, the average gap is 51 per cent, of which 23 percentage points are explained by those socio-de- mographic characteristics of the rural population. In the two countries, a substantial part of the discrepancy in income from self-employment is therefore not explained by the estimated decomposition model. XFigureB.5.2.Averaageemploymentincomegapsbetweenruralandurbanself-employedworkers,decomposed,2019(percentage) Note: For each country, the unexplained and explained components of the average gap are estimated using the Blinder- Oaxaca decomposition explained in box3. Source: Analysis based on ILO harmonized Microdata collection (ILOSTAT), 2019. See appendix for more details. Furthermore, in both countries, rural self-employed women earn less than their male counterparts: the rural gender gap in income from self-employment is 43 and 14 per cent in Angola and Brazil, respectively. On average, for self-employed workers, gender-related differences in terms of income are higher in rural areas than in urban ones in Brazil, as the gender employment income gap is 5 percentage points lower in urban areas. However, this is not the case in Angola, where the urban gender gap in income from self-employ- ment reaches 50 per cent (figure B.5.3).
31 ILO Working Paper 107 XFigureB.5.3.Genderemploymentincomegapamongruralandurbanself-employedworkers,2019, (percentage) Note: The gender employment income gap is expressed as a proportion of men’s average hourly income from employment.. Source: Analysis based on ILO harmonized Microdata collection (ILOSTAT), 2019. See appendix for more details.
32 ILO Working Paper 107 X4 Legal frameworks for tackling rural–urban imbalances in employment and wages The role of international labour standards In 2008, the International Labour Conference acknowledged the “huge gap” in the protection afforded to rural workers21 and called upon governments to review their legislation with a view to extending the coverage of protection to rural workers, including rural wage earners, and in particular to ensure that these enjoy the protection of fundamental principles and rights at work. The Conference also reaffirmed the crucial role of international labour standards in guiding national legislation and policy to help address labour protection gaps, as they provide an internationally recognized framework for governments in the implementation of decent work principles in all spheres of work, including in rural areas (ILO 2008).22 There is no international labour standard expressly dealing with rural–urban inequalities. Rather, a number of ILO instruments address various aspects of the issue,23 as illustrated in box 6 for those related to this paper’s thematic focus on employment and wages. XBox6.Internationallabourstandardsrelevanttoemploymentandwagesinruralareas Wages ●C.26* – Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) ●C.131 – Minimum Wage Fixing Convention, 1970 (No. 131) ●C.95 – Protection of Wages Convention, 1949 (No. 95) ●C.99* – Minimum Wage Fixing Machinery (Agriculture) Convention, 1951 (No. 99) ●R.135 – Minimum Wage Fixing Recommendation, 1970 (No. 135) ●R.89* – Minimum Wage-Fixing Machinery (Agriculture) Recommendation, 1951 (No. 89) Equality of opportunity and treatment ●C.100 – Equal Remuneration Convention, 1951 (No 100) ●C.111 – Discrimination (Employment and Occupation) Convention, 1958 (No. 111) ●R.90 – Equal Remuneration Recommendation, 1951 (No. 90) ●R.111 – Discrimination (Employment and Occupation) Recommendation, 1958 (No. 111) Employment policy and promotion ●C.122 – Employment Policy Convention, 1964 (No. 122) 21 According to Article 2 of the Rural Workers’ Organisations Convention, 1975 (No. 141), the term “rural worker” refers to “any person engaged in agriculture, handicrafts or a related occupation in a rural area, whether as a wage earner or, subject to the provisions of paragraph 2 of this Article, as a self-employed person such as a tenant, sharecropper or small owner–occupier”. 22 Human rights law can also provide a relevant legal framework. The “Declaration on the rights of peasants and other people working in rural areas”, annexed to the 2012 final study of the Human Rights Council Advisory Committee on the advancement of the rights of peasants and other people working in rural areas (United Nations document A/HRC/19/75), namely states that “[a]ll peasants, women and men, have equal rights” (Art. 2(1)) and “are free and equal to all other peoples and have the right to be free from [...] [discrimination] based on their economic, social and cultural status” (Art. 2(3)). This instrument also lays down that peasants have “the right to live in dignity” and “the right to an adequate standard of living, which includes the right to an adequate income to fulfil their basic needs and those of their families” (Art. 3(2) and Art. 3(3)). 23 For a comprehensive overview of international labour standards applicable to rural work, see ILO (2008), Annex II.
33 ILO Working Paper 107 ●R.122 – Employment Policy Recommendation, 1964 (No. 122) ●R.169 – Employment Policy (Supplementary Provisions) Recommendation, 1984 (No. 169) ●R.193 – Promotion of Cooperatives Recommendation, 2002 (No. 193) ●R.204 – Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204) Plantations ●C.110 and P.110 – Plantations Convention, 1958 (No. 110) and its Protocol of 1982 ●R.110 – Plantations Recommendation, 1958 (No. 110) Tenants and sharecroppers ●R.132 – Tenants and Share-croppers Recommendation, 1968 (No. 132) Indigenous and tribal peoples ●C.169 – Indigenous and Tribal Peoples Convention, 1989 (No. 169) ●R.104 – Indigenous and Tribal Populations Recommendation, 1957 (No. 104) Labour administration and inspection ●C.150 – Labour Administration Convention, 1978 (No. 150) ●C.129 – Labour Inspection (Agriculture) Convention, 1969 (No. 129) ●R.133 – Labour Inspection (Agriculture) Recommendation, 1969 (No. 133) Freedom of association ●C.87 – Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) ●C.98 – Right to Organise and Collective Bargaining Convention, 1949 (No. 98) ●C.11* – Right of Association (Agriculture) Convention, 1921 (No. 11) ●C.141 – Rural Workers’ Organisations Convention, 1975 (No. 141) ●C.154 – Collective Bargaining Convention, 1981 (No. 154) ●R.149 – Rural Workers' Organisations Recommendation, 1975 (No. 149) ●R.163 – Collective Bargaining Recommendation, 1981 (No. 163) * Instrument with interim status Source: ILO NORMLEX database International labour standards on equality and the elimination of discrimination in respect of employment and occupation One of the most important international labour standards addressing rural–urban imbalances is the Discrimination (Employment and Occupation) Convention, 1958 (No. 111).24 The Convention aims to eliminate any discrimination in respect of employment and occupation (Art. 2) and encompasses discrimination on the basis of social origin (Art. 1(1)(a)), which arises when an individual’s membership of a class, socio-occupational category or caste determines his or her occupational future (ILO 1988). 24 As it is one of the eight fundamental Conventions (see ILO 1998), all Members, even if they have not ratified it, have an obligation arising from the very fact of membership in the Organization, to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental right which is the subject of this Convention, namely the elimination of discrimination in respect of employment and occupation.
34 ILO Working Paper 107 Furthermore, rural–urban inequalities may have particularly adverse effects for female workers, who may also be subject to discrimination and be paid lower wages than their male counterparts. In that regard, international labour standards provide a framework for policy design and action. Indeed, the widespread ratification of Convention No. 111 and the Equal Remuneration Convention, 1951 (No. 100),25 attest to a general acceptance of the principles of non-discrimina- tion and equal remuneration, which also apply to rural workers. Convention No. 111 is aimed at the elimination of any discrimination based on, inter alia, sex (Arts 1–2), while its accompanying Discrimination (Employment and Occupation) Recommendation, 1958 (No. 111), prescribes that all persons should, without discrimination, enjoy equality of opportunity and treatment in respect of, inter alia, remuneration for work of equal value (para. 2). The principle of equal remuneration for men and women for work of equal value is also promoted by Convention No. 100 (Art. 2) and by the Plantations Recommendation, 1958 (No. 110) (para. 27). Finally, the Indigenous and Tribal Peoples Convention, 1989 (No. 169), lays down both the principle of equal remuneration for work of equal value and the principle of equal opportunities and equal treatment in employment for men and women (Arts 2–3).26 Significantly, the ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) has addressed the situation of female rural workers on several occasions. For instance, in relation to Convention No. 100, the Committee recently issued an observation requesting the Government under review to step up its efforts to tackle the gender wage gap, particularly in the agricultural sector, and to provide information on the measures taken in that regard (CEACR 2023a). When examining the implementation of Convention No. 111, the Committee has asked for information on the measures taken to increase the outreach and impact of policies to promote equality between women and men in employment and occupation, and on how such measures particularly address the situation of women in rural areas and in informal work (CEACR 2023b). International labour standards on minimum wages and wage-setting With regard to the specific question of wage‑setting for rural workers, the Minimum Wage Fixing Convention, 1970 (No. 131), and its accompanying Minimum Wage Fixing Recommendation, 1970 (No. 135), are particularly relevant.27 Convention No. 131 calls for the creation of a system of minimum wages28 that covers all groups of wage earners whose terms of employment are such that coverage would be appropriate, with any exceptions needing to be justified (Art. 1). It provides for the implementation of a machinery to fix and adjust minimum wages from time to time, with the full consultation and, where appropriate, direct participation of the social partners, on an equal footing, as well as independent experts (Art. 4). It also specifies that minimum wage levels must take into account, inter alia, the needs of workers and their families and economic factors (Art. 3). Finally, it requires the adoption of appropriate measures to ensure the effective application of minimum wages, such as adequate inspection (Art. 5). Recommendation No. 135 elaborates on several provisions of Convention No. 131 and makes clear that broad coverage can 25 Just like the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), Convention No. 100 is also one of the eight fundamental Conventions. 26 Although it goes beyond the scope of this paper, it is worth mentioning here that female rural workers are covered by a specific protection in the Safety and Health in Agriculture Convention, 2001 (No. 184), which stipulates that “[m]easures shall be taken to ensure that the special needs of women agricultural workers are taken into account in relation to pregnancy, breastfeeding and reproductive health” (Art. 18). 27 The Minimum Wage Fixing Machinery (Agriculture) Convention, 1951 (No. 99), and its accompanying Minimum Wage-Fixing Machinery (Agriculture) Recommendation, 1951 (No. 89), are also pertinent to wage‑setting in rural areas, but they have now been classified as having interim status. 28 Minimum wages have been an important topic at the ILO ever since its inception. Indeed, the 1919 ILO Constitution called in its Preamble for an urgent improvement of conditions of labour, including “the provision of an adequate living wage”. In 1944, the ILO Declaration of Philadelphia referred to the importance of ensuring “a minimum living wage to all employed and in need of such protection”. This was reiterated in the 2008 ILO Declaration on Social Justice for a Fair Globalization.
35 ILO Working Paper 107 be achieved either by fixing a single minimum wage of general application or by fixing a series of minimum wages applicable to particular groups of workers (para. 5).29 These instruments therefore provide both for the exclusion of certain categories of workers from the system of minimum wages, although such exclusions should be kept to the minimum, and the fixing of different levels of protection (Convention No. 131, Art. 1; and Recommendation No. 135, paras 4–5). As highlighted in section 4, agricultural workers make up one of the two broad categories of workers most often excluded from minimum wage legislation, alongside domestic workers. When they are not excluded, they may be offered a threshold of protection below the standard minimum wage30 (Eyraud and Saget 2005). The CEACR has dealt with different aspects of wage‑setting in rural areas in its observations and direct requests. For instance, in relation to Convention No. 131 and the Minimum Wage Fixing Machinery (Agriculture) Convention, 1951 (No. 99), the Committee has reiterated on several occasions that wages must be maintained at such a level as to provide a satisfactory standard of living to workers and their families (CEACR 2004a; 2008a; 2022), when faced with failures in the readjustment of minimum wages for agricultural workers. Furthermore, in the context of Convention No. 131, it has observed that minimum wage fixing is not a mere formality and should be the subject of prior consultations with the social partners (CEACR 2005). In an observation on the implementation of Convention No. 131, the Committee underlined the key role of the labour inspectorate in addressing violations of the minimum wage legislation in rural areas (CEACR 2012a). Accordingly, in relation to the Labour Inspection Convention, 1947 (No. 81), and the Labour Inspection (Agriculture) Convention, 1969 (No. 129), the Committee has requested detailed information on the functioning of labour inspection in agriculture (CEACR 2023c). As agricultural workers are often excluded from minimum wage protection, collective bargaining has a crucial role to play in wage-setting and enabling workers in this category to secure improvements to their terms and conditions of employment. In that regard, two fundamental Conventions are central: the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). The first stipulates that workers and employers, “without distinction whatsoever”, must have the right to establish and join organizations of their own choosing (Art. 2), while the second lays down that workers are to enjoy adequate protection against acts of anti‑union discrimination in respect of their employment (Art. 1). The Collective Bargaining Convention, 1981 (No. 154), and its accompanying Recommendation also apply to all branches of economic activity, and they promote collective bargaining (Art. 5(1) of the Convention). Other instruments that are particularly relevant to rural workers are the Rural Workers’ Organisations Convention, 1975 (No. 141), and its accompanying Recommendation. According to the former, “[a]ll categories of rural workers, whether they are wage earners or self-employed, shall have the right to establish and […] join organisations, of their own choosing without previous authorisation” (Art. 3(1) of the Convention). Member States ratifying the Convention have an obligation to adopt and implement a policy of active encouragement in respect of such organizations (Art. 5(1)). Convention No. 141 also provides that an objective of national policy on rural development should be to facilitate the establishment and growth of strong and independent organizations of rural workers as an effective means of ensuring their participation, without discrimination, in economic and social development and the resulting benefits (Art. 4).31 29 A relevant tool for the design, implementation and review of minimum wages is the Minimum Wage Policy Guide (ILO 2016b), which emphasizes key principles of good practice and provides examples of the pros and cons of different policy options. 30 Several reasons may be cited to explain this lower standard of protection – for instance, the fact that agricultural workers are often paid in kind to some extent; the fact that the cost of living is lower in rural areas; difficulties in enforcing the minimum wage in isolated rural areas; the policy objective of maintaining a high employment rate in areas where there are few alternatives to employment in the agricultural sector; and a bias against agricultural labour. 31 The Right of Association (Agriculture) Convention, 1921 (No. 11), which provides that ratifying Member States undertake to “secure to all those engaged in agriculture the same rights of association and combination as to industrial workers, and to repeal any statutory or other provisions restricting such rights in the case of those engaged in agriculture” (Art. 1) is the most highly ratified ILO Convention dealing specifically with agricultural workers (123 ratifications). However, it has interim status.
36 ILO Working Paper 107 The CEACR has likewise raised on several occasions the need to promote trade unions and organizations in the rural sector (CEACR 2016; 2021). Linking this to the specific issue of wage‑setting, in the context of Convention No. 131, the Committee has deplored unilateral fixing of the minimum wage of rural workers and reiterated that full consultation with organizations of the employers and workers concerned is an obligation that applies both when determining the scope of the minimum wage system and when operating and modifying the wage‑fixing machinery (CEACR 2003; 2004b). Other international labour standards dealing with wages With regard to another aspect of the matter, the Protection of Wages Convention, 1949 (No. 95), which applies to all workers without exception (Art. 2(1)), provides for the protection and timely payment of wages (Art. 12). It stipulates that wages are payable only in legal tender (Art. 3). The partial payment of wages in the form of in-kind allowances – a problematic practice that is quite widespread in the agricultural sector – may only be authorized in specific circumstances for certain occupations (Art. 4). In relation to this instrument, the CEACR has issued direct requests emphasizing that national provisions pertaining to the protection of wages should not exclude rural workers (CEACR 2012b), and that such protection for rural workers has to be explicitly set out in the national legislation and cannot take the form of a mere practice (CEACR 2009). When confronted with contractual practices aimed at disguising a rural employment relationship, the Committee has also recalled in the context of Convention No. 95 that the related obligations “cannot be bypassed by mere terminological subterfuges, but require the extended and bona fide coverage by national legislation of labour remuneration whatever form it takes” (CEACR 2017; ILO 2003). In another instance related to the same standard, the Committee reaffirmed the relevance of paying wages on working days only and at or near the workplace for rural workers, who may not be fully conversant with electronic means of payment (CEACR 2008b). Some international labour standards dealing with specific categories of workers, or of rural work, also address the question of wages. For instance, the Plantations Convention, 1958 (No. 110), contains several relevant provisions covering, inter alia, the fixing of minimum wages, forms and methods for the payment of wages, the freedom of workers to dispose of their wages, deductions from wages, regular payment of wages and obligations to provide information (Arts 24–35). The accompanying Plantations Recommendation, 1958 (No. 110), provides further guidance on these aspects (paras 9–26). Orientation for regulating the wages of Indigenous persons, who often live and work in rural areas, can be found in the Indigenous and Tribal Populations Recommendation, 1957 (No. 104).32 It is therefore evident that international labour standards, whether of general application or specific to rural work, are a useful source of guidance for the design and implementation of legislative and policy frameworks to address inequalities in rural wages and to ensure that rural workers enjoy the protection of fundamental principles and rights at work. The following subsection will explore the realization of these principles and rights at the national level through the prism of two case studies. 32 This instrument requires that the wages of workers belonging to the populations concerned should be protected, in particular, by providing that wages are normally paid only in legal tender; by prohibiting the payment of any part of wages in the form of alcohol or other spirituous beverages or noxious drugs; by prohibiting the payment of wages in taverns or stores, except in the case of workers employed therein; and by regulating the maximum amounts and manner of repayment of advances on wages and the extent to which and conditions under which deductions from wages may be permitted (Recommendation No. 104, para. 10).
37 ILO Working Paper 107 National practices related to inequalities in rural areas To tackle rural–urban inequalities in employment and wages, some countries have passed specific legislation addressing various aspects of the problem. That is the case, for example, of Brazil (OECD 2021) and China (Stepan and Lu 2016). Both countries have enacted assistance programmes in the form of rural pension schemes to provide adequate old-age income to rural workers. In the Republic of Moldova, one component of the Government’s efforts to combat undeclared work is a voucher system for occasional workers in agriculture, which facilitates the registration of workers and social security coverage (ILO 2022b). In Guinea-Bissau, a new Labour Code was adopted in July 2021, in which it is stipulated, inter alia, that the minimum wage is payable to all workers, including rural workers, without distinction based on sex or any other grounds, in an amount fixed annually by the Government, after consultation with the social partners. The present subsection will discuss in more detail efforts to address rural–urban inequalities in India and Austria. The first of these two countries warrants a particularly focused review, as the Indian Government has been undertaking efforts for almost two decades now to generate wage employment in rural areas, and also because regular evaluations of the impact of these attempts are available. Meanwhile, Austria is especially relevant from the perspective of gender equality. Bearing in mind that agriculture is a sector traditionally characterized by discrimination against women (ILO 2007), Austria is a notable example of a country that has adopted legislation for the equal treatment of men and women in rural areas. Although assessing their success is a separate and often complex endeavour, the study of such initiatives can help to inform the debate on rural–urban disparities and contribute to the development of good practices for tackling these. India’s National Rural Employment Guarantee Schemes: The impact of rural public works on agricultural wages The Mahatma Gandhi National Rural Employment Guarantee Act, adopted in 2005 (India, Ministry of Law and Justice 2005), provides the legal framework for India’s National Rural Employment Guarantee Schemes (NREGS), including the institutional structure for their implementation, and defines the rights and obligations of participants. The objective of NREGS is to enhance the livelihood security of people in rural areas by generating wage employment through public works that develop the infrastructure base of those areas. To that end, the Act grants the legal right to 100 days of wage employment per financial year to every adult member of a rural household who asks for employment and is willing to perform unskilled manual work. To ensure accessibility, employment must be provided within a 5 km radius of the participant’s village. Involvement in the scheme is to be made possible within 15 days of the date of application; otherwise, the applicant must be paid an unemployment allowance. The National Rural Employment Guarantee Act contains several provisions dealing with wages, including minimum wages, the protection of wages and labour protection. Other provisions of the Act focus on mandatory information and education campaigns, access to grievance redressal mechanisms and the involvement of participants in decision-making on the works to be performed in their village. The rights of rural workers have been further reinforced through citizen-centred monitoring structures that increase accountability (Ehmke 2015). The Act also contains special provisions for the three most marginalized groups in Indian society, namely women, “Scheduled Castes” and “Scheduled Tribes”. To encourage women’s participation, the Act established a mandatory one-third quota for them. Additionally, it requires that day-care facilities be provided at the worksite, that the work take place near the place of residence and that equal wages be paid to women and men. As for members of Scheduled Castes and Scheduled Tribes, it is stipulated in the Act that when developing rural infrastructure, works creating individual assets must be prioritized on land owned by households from those two groups. Other provisions deal with their representation in the local councils tasked with implementation of the schemes.
44 ILO Working Paper 107 Country/Territory Survey Year Survey used for figuresB.2.1and B.2.2inbox2 Survey used forfigureB.2.3 inbox2 Chile Encuesta de Caracterización Socioeconómica Nacional (National Socio-Economic Characterization Survey) 2017 Yes Yes Colombia Gran Encuesta Integrada de Hogares (Great Integrated Household Survey) 2019 Yes No Côte d’Ivoire Enquête Nationale sur l’Emploi (National Employment Survey) 2019 Yes No Dominican Republic Encuesta Nacional Continua de Fuerza de Trabajo (Continuous National Labour Force Survey) 2019 Yes Yes Ecuador Encuesta de Empleo, Desempleo y Subempleo (Employment, Unemployment and Underemployment Survey) 2019 Yes No Egypt LFS 2019 Yes Yes El Salvador Encuesta de Hogares de Propósitos Múltiples (Multipurpose Household Survey) 2019 Yes No Eswatini LFS 2016 Yes No Ethiopia National Labour Force and Migration Survey 2013 Yes Yes France Enquête Emploi en Continu (Continuous Survey of Employment) 2019 Yes Yes Ghana LFS 2015 Yes Yes Greece LFS 2019 Yes Yes Guatemala Encuesta Nacional de Condiciones de Vida (National Survey of Living Conditions) 2014 Yes No Guyana LFS 2019 Yes Yes Honduras Encuesta Permanente de Hogares de Propósitos Múltiples (Multipurpose Permanent Household Survey) 2019 Yes No India Periodic Labour Force Survey 2019 Yes No Jordan LFS 2019 Yes Yes Kenya Kenya Continuous Household Survey Programme 2019 Yes No Lao People’s Democratic Republic LFS 2017 No No Lesotho LFS 2019 No Yes Madagascar Enquête Nationale sur l'Emploi et le Secteur Informel (National Survey of Employment and the Informal Sector) 2015 Yes No
45 ILO Working Paper 107 Country/Territory Survey Year Survey used for figuresB.2.1and B.2.2inbox2 Survey used forfigureB.2.3 inbox2 Mali Enquête Modulaire et Permanente auprès des Ménages (Modular Permanent Household Survey) 2018 Yes Yes Mexico Encuesta Nacional de Ocupación y Empleo (National Survey of Occupation and Employment) 2019 Yes Yes Mongolia Household Socio-Economic survey 2018 Yes No Myanmar LFS 2019 Yes No Namibia LFS 2018 Yes Yes Nepal LFS 2017 Yes Yes Nicaragua Encuesta Nacional de Hogares sobre Medicíon de Nivel de Vida (National Household Living Standards Measurement Survey) 2014 Yes No Occupied Palestinian Territory LFS 2019 Yes Yes Pakistan LFS 2019 Yes No Panama Encuesta de Mercado Laboral (Labour Market Survey) 2019 Yes No Peru Encuesta Nacional de Hogares (National Household Survey) 2019 Yes No Philippines LFS 2019 Yes Yes Republic of Moldova LFS 2019 No Yes Rwanda Enquête Intégrale sur les Conditions de Vie des Ménages (Integrated Household Living Conditions Survey) 2017 Yes Yes Senegal Enquête Nationale sur l’Emploi (National Employment Survey) 2019 No No Serbia LFS 2019 Yes No Sierra Leone Sierra Leone Integrated Household Survey 2018 Yes Yes Sri Lanka LFS 2019 Yes Yes Switzerland Enquête Suisse sur la Population Active (Swiss Labour Force Survey) 2019 Yes Yes Thailand LFS 2019 Yes No Togo Enquête Regionale Integrée sur l’Emploi et le Secteur Informel (Regional Integrated Survey on Employment and the Informal Sector) 2017 Yes Yes Türkiye LFS 2013 Yes Yes Uganda LFS 2017 Yes No United States of America Current Population Survey 2019 Yes Yes
46 ILO Working Paper 107 Country/Territory Survey Year Survey used for figuresB.2.1and B.2.2inbox2 Survey used forfigureB.2.3 inbox2 Uruguay Encuesta Continua de Hogares (Continuous Household Survey) 2019 Yes No Viet Nam LFS 2019 Yes Yes Yemen LFS 2014 Yes Yes Zambia LFS 2019 No Yes LFS = Labour Force Survey
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52 ILO Working Paper 107 Acknowledgements We would like to thank several colleagues at the ILO, especially Catherine Saget, Patrick Belser, Rosina Gammarano, Tahmina Karimova and Giulia de Lazzari, for their helpful comments on this paper.
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