Employment and wage disparities between rural and urban areas

Sévane Ananian

Giulia Dellaferrera

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.

Introduction

Livelihood disparities between rural and urban areas have been observed worldwide. Globally, the poverty rate in rural areas is estimated at 17.2 per cent, which is more than three times the rate in urban areas (5.3 per cent) (UN 2019). This means that around 79 per cent of the world’s poor live in rural areas.

These disparities between rural and urban areas stem to some extent from differences in labour market outcomes. More specifically, combinations of various outcomes in terms of employment and labour incomes could explain in part the relative disadvantage faced by people living outside cities. Existing evidence shows, for instance, that while urban and rural employment rates are usually quite similar in high-income countries, people in rural areas in poorer countries have a stronger tendency to participate in employment, as the lack of social protection or financial support may prompt them to take up any available job regardless of its quality (ILO 2020a). Significantly, one in ten agricultural workers were in informal employment in 2016 – a rate that may be indicative of job quality deficits in the rural labour market.

However, not many global studies have sought to measure rural–urban discrepancies in labour market outcomes while taking into account the specific socio‑demographic characteristics of people living in these two types of area. Raw assessments of rural–urban gaps in labour force participation and unemployment could give a partial picture of the rural–urban divide in the labour market, as these gaps are likely to reflect to a certain extent the different compositions of rural and urban populations – including in terms of age and education. For instance, employment has been found to depend on education and experience in many cases, as in member countries of the Organisation for Economic Co‑operation and Development (OECD), where people with higher educational attainment are, on average, more likely to have a job (OECD 2014). In that regard, disentangling the effects of people’s socio‑demographic characteristics from other dimensions that may manifest themselves along the rural–urban divide is critical when analysing the labour market outcomes of rural populations.

Furthermore, only a few international studies have investigated rural–urban gaps in working conditions, including earnings. There are several factors that may give rise to substantial rural–urban differences in labour income across countries, such as a relatively lower rural productivity. Empirical evidence from developing countries indeed points to productivity in the agricultural sector, which accounts for a large share of employment in rural areas, being substantially lower than in other sectors (Gollin, Lagakos and Waugh 2014). In OECD countries, productivity levels in rural areas were, on average, 20 per cent lower than those in urban areas in 2015, with an average gap of 46 per cent between the most and least productive regions in a country (OECD 2019).1

As for the factors that shape rural–urban discrepancies in productivity, the available empirical evidence shows that the spatial “sorting” of firms and workers is likely to play a critical role. For example, skilled workers may want to move to areas that have features which they regard as valuable or that offer higher returns to education, while large firms may be prompted by various incentives to relocate their facilities to areas with big markets, where their productivity can be boosted through improved worker–firm matching (Mion and Naticchioni 2009; Verstraten, Verweij and Zwaneveld 2018).

Nevertheless, causes not directly linked to productivity and workers’ skills may also explain part of the observed rural–urban gap in earnings. For instance, spatial inequalities in relation to the treatment of people in the labour market may have an impact on employment and wage outcomes. In a sample of Latin American countries, the ethnic wage gap was thus found to be higher in rural areas than in urban ones, even after controlling for workers’ individual characteristics such as education and age (Atal, Ñopo and Winder 2009). Focusing on specific population groups, some studies have highlighted income gaps between indigenous and non‑indigenous populations, which tend to be larger in rural or remote areas (Wilson and Macdonald 2010; AIHW 2023). Empirical studies have also pointed to the rural–urban divide as a source of discrimination impacting on the employment and wage prospects of people from rural areas in some countries, such as China because of the hukou system (Cheng et al. 2013).2

The present study seeks to provide a global overview of rural–urban disparities in labour market outcomes while taking into consideration the specificities of rural populations in terms of socio-demographic composition, particularly those relating to human capital such as education and experience. A precise delineation of the factors that may shape rural–urban disparities in the labour market is crucial for the design of policies aimed at helping people in rural areas.

This study is intended to contribute to the ILO’s efforts to support rural development – a topic that has been on the Organization’s agenda ever since its establishment in 1919, and whose importance was reaffirmed by the International Labour Conference’s adoption, in 2008, of the resolution and conclusions on promoting rural employment for poverty reduction. Since the renewal of its commitment, the ILO has been assisting governments and employers’ and workers’ organizations in their transformation of rural economies. In addition, the Sustainable Development Goals adopted in 2015 by the United Nations General Assembly call for the eradication of extreme poverty for all people everywhere, including poverty associated with the rural–urban divide (Goal 1).3

After a brief description of the data and the definition of urban and rural areas used for the preparation of this working paper (section 1), the analysis focuses on the labour market outcomes that describe male and female employment in both geographical areas, namely, labour force participation, unemployment and status in employment (section 2). Drawing on a broad sample of countries at various levels of development, this overview seeks to take into account the specific socio‑demographic characteristics of rural populations, including education and age. For the same countries, an assessment of the gaps in earnings between rural and urban areas is undertaken in section 3 with a view to identifying the share of the earnings gap that cannot be ascribed to rural specificities in terms of human capital and the occupations held by workers. Section 4 provides a review of the legal frameworks that can be used to tackle rural–urban inequalities in employment and wages. A number of conclusions are offered after section 4.

Note to typesetter: I am highlighting non-breaking hyphens in blue because sometimes these are not converted properly when going from Word to PDF.

Data and definitions

A sample of household surveys from 58 countries

The analysis relies on data from labour force surveys and other household surveys in the ILO Harmonized Microdata collection,4 which covers over 160 countries. Since the focus of this study is on the labour market outcomes of people living in rural areas, the analysis draws on surveys that include information on both the employment status and earnings of household members, in addition to the geographical location of the household (urban vs. rural areas). When it comes to job characteristics and earnings, the reported estimates refer to the main jobs of individuals.

To eliminate variation in earnings due to differences in working time, the analysis focuses on gross hourly wages. A descriptive overview of working time in rural and urban areas is nevertheless provided separately (see box 2 further down).

Even if they collected information on these dimensions, surveys from countries with a very small surface area – islands such as Comoros, Maldives and Samoa – were not included in the sample studied. In such countries, the boundaries between urban and rural areas may be thin, leading to a blurring of rural–urban differences and making comparisons less meaningful. Nigeria was not included in the sample either because the available survey did not provide key information required for the analysis, such as the occupations of workers.

The final working database comprises 58 countries, covering all regions and different levels of development. In terms of regions, the sample includes 18 countries from Africa, 3 from the Arab States, 14 from Asia and the Pacific, 7 from Europe and Central Asia, and 16 from the Americas. In terms of country income groups, there are 8 high-income countries, 13 upper‑middle‑income countries, 28 lower‑middle‑income countries and 9 low-income countries.5 The selected countries, and their corresponding surveys, are listed in the appendix (table A1).

When averages are estimated for the whole sample, or by country income group, each country is weighted equally. This makes it possible to highlight the role of country-specific institutions and policies. Weighting each country by its number of working individuals would have caused the results to be driven mainly by the more populous countries.

To avoid reflecting short-term disruption linked to the COVID-19 pandemic, the surveys selected were from 2019 or the latest available year before 2019. During the pandemic, many national statistical offices adapted their data collection processes to the social distancing measures implemented in their countries. This is likely to impact on cross-country analysis for the years 2020 and 2021, especially on comparisons between surveys conducted during the COVID-19 crisis and others. Moreover, particularly in 2020, internal migration flows were observed in the context of the pandemic, often resulting in migration losses in urban areas and gains in rural areas. However, these trends appear to have been temporary (González‐Leonardo et al. 2022; Rowe et al. 2023). With the increasing availability of post-pandemic data, it should become possible to assess more accurately the impact that the COVID-19 crisis has had on the rural–urban divide.

National definitions of urban and rural areas

The distinction between urban and rural areas used in this paper relies on the national definitions of geographical areas adopted by countries.6 Differences can be observed across countries in how they define rural areas, notably with regard to the criteria used to identify the integration of an area into an urban unit. For example, until 2020, the French national statistical office – the National Institute of Statistics and Economic Studies (INSEE) – defined rural areas as all communes not belonging to an urban unit, itself defined as a grouping of more than 2,000 inhabitants in an area with a certain continuity of buildings, a feature that is characteristic of "towns" (D’Alessandro, Levy and Regnier 2021).7 In contrast, the classification developed by the Brazilian Institute of Geography and Statistics (IBGE) relies on successive groupings based on the total population living in high-density areas, the share of the population in such areas and their location. In addition, accessibility to goods and services is used to gauge the integration of rural and urban spaces (do Carmo Dias Bueno and Neves de Souza Lima 2019).

Using national definitions of urban and rural areas makes it possible to cover a large number of countries worldwide by drawing on their labour force surveys and other household surveys collecting labour market information. The implementation of a harmonized definition of urban and rural areas across countries would have required various additional country data sources not exhaustively available to the ILO, such as censuses. However, existing evidence shows that there is substantial overlap between the various definitions of rural and urban areas.8

Based on the national definitions, the share of people living in rural areas varies greatly across countries, ranging from 83 per cent of the working-age population in Sri Lanka to 6 per cent in Uruguay (see figure A1 in the appendix).9 The share of the population living in rural areas tends to decrease with a country’s level of development.

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-employment). 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.

Box 1. Estimating the effect of living in a rural area on the probability of selected labour market outcomes

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:

$P (Y) = \frac{1}{1 + e^{- (α + γ R u r + X β)}} (1)$

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 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

Table 1. Effect of living in a rural area on the probability of labour force participation, unemployment and wage employment (percentage points)

	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***
Wage employment (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 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.

Figure 1. Share of women among employees, by country income group, 2019 or latest available year (percentage)

Figure 2. Share of women among self‑employed workers, by country income group, 2019 or latest available year (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.

Box 2. Working time in rural and urban areas

Working beyond 48 hours a week is more common in urban areas that in rural ones, especially among the self-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 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.

Figure B.2.1 Distribution of self employed workers in rural and urban areas according to their number of hours worked, by country income group, 2019 or latest available year (percentage)	Figure B.2.2 Distribution of employees in rural and urban areas according to their number of hours worked, by country income group, 2019 or latest available year (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.

Temporary employment is more widespread in rural areas

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.

Figure B.2.3. Share of temporary contratcts in rural and urban areas, by country income group, 2019 or 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.

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).

Figure 3. Share of rural employees in each quintile of the wage distribution, by country income group, 2019 or latest available year (percentage)	Figure 4. Share of low-paid workers among rural and urban employees, by country income group, 2019 or latest available year (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 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.

Figure 5. Distribution of rural and urban employees according to their educational level, by country income group, 2019 or latest available year (percentage)	Figure 6. Distribution of rural and urban employees according to their age group, by country income group, 2019 or latest available 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).

Figure 7. Distribution of occupations among rural and urban employees, by country income group, 2019 or latest available year (percentage)

Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details.

These differences in the composition of rural and urban employees help to explain the wage gap between rural areas and cities. Specifically, sizeable shares of employees with low educational attainment and little job experience in rural areas may widen the gap in wages with urban areas. To control for the differences in education, experience and occupations between rural and urban wage employment, we used a Blinder–Oaxaca econometric model. This technique breaks down the pay gap into a part that can be explained by the observable characteristics of individuals (such as age and education) and an unexplained part (see box 3).

Box 3. Analysing the rural-urban wage gap

To estimate the extent of the pay gap observed between rural and urban employees that is attributable to human capital and the characteristics of occupations, a Blinder–Oaxaca econometric technique is used for each country (Blinder 1973; Oaxaca 1973). Wage equations are first estimated separately for rural and urban employees. Then the estimated parameters of these equations are used to decompose the average pay gap into a part explained by the observable characteristics considered in the equations, and an unexplained part.

Formally, the wage equations estimated are as follows:

$W_{R} = X_{R} β_{R} + ϵ_{R}$

$W_{U} = X_{U} β_{U} + ϵ_{U}$

Where $W_{}$ is the logarithm of the hourly wages of rural (R) and urban (U) employees, and $X_{}$ is a vector of variables including a constant term and dummies that describe employees’ observable characteristics (more specifically “human capital” and occupations): age, education level, number of hours worked per week (below 20, between 20 and 40, above), sector of work (public/private), and occupation according to the International Standard Classification of Occupations (ISCO-08) aggregated into six categories.

In this framework, the average pay gap is calculated as the sum of two components:

${\bar{W}}_{U} - {\bar{W}}_{R} = ({\bar{X}}_{U} - {\bar{X}}_{R}) {\hat{β}}_{U}$ + ${\bar{X}}_{R} ({\hat{β}}_{U} - {\hat{β}}_{R})$

where $({\bar{X}}_{U} - {\bar{X}}_{R}) {\hat{β}}_{U}$ is the explained part, attributable to differences in observable characteristics between rural and urban employees, and ${\bar{X}}_{R} ({\hat{β}}_{U} - {\hat{β}}_{R})$ is the unexplained part of the gap. In other words, the explained part of the gap corresponds to the difference in hourly wages between rural and urban employees that is attributable to differences in the composition of the workforce in terms of age, education level, institutional sector, occupation and working time. The unexplained part of the wage gap is due to factors not taken into account in the decomposition.

Rural employees earn on average 24 per cent less than urban employees, with half of that gap explainable by differences in terms of education, experience and occupation

Observable socio-demographic characteristics such as education and experience account for half of the wage gap between urban and rural areas. On average across the sampled countries, the rural–urban wage gap is 24 per cent, of which 12 percentage points correspond to differences in terms of observable characteristics between rural and urban employees (figure 8).15 The remainder of the wage gap is therefore not explained by the observable characteristics considered in the analysis. Beyond the average figures, however, there are noticeable differences across levels of development. In particular, the extent of the unexplained part of the gap appears to be linked to countries’ income per capita, as it is only 7 percentage points in high-income countries, compared with 11 and 23 percentage points in middle- and low-income countries, respectively. This suggests that, in developing countries, large proportions of the rural–urban wage gap derive from factors not taken into account in the wage decomposition, including the environmental and institutional context or labour productivity components not reflected in the measures of education and experience considered here.

The results presented in this section are, on the whole, in line with the studies highlighting urban wage premia, including for the very few developing countries in which an in-depth analysis of the rural–urban wage gap has already been carried out. For instance, in the case of Rwanda a recent study pointed to an urban wage premium, even after controlling for workers’ individual characteristics (Bower, Gupta and Menon 2021). In Nigeria, Uganda and the United Republic of Tanzania, substantial urban wage premia were estimated for 2009–13 (Jones, D’Aoust and Bernard 2017). In Colombia, positive effects of urban agglomeration on wages were found for 1996–2012 (Duranton 2016). In India and Brazil, studies have noted a decrease in urban wage premia over the periods 1983–2005 and 2002–09, respectively (Hnatkovska and Lahiri 2013; Cruz and Naticchioni 2012).

Although the rural–urban wage gap is in favour of urban employees nearly everywhere, average wages are higher in rural areas in a few countries. In Jordan, the Occupied Palestinian Territory and Yemen the pay gap is thus negative (–27 per cent, –20 per cent and –4 per cent, respectively), meaning that rural employees earn, on average, more per hour than their urban counterparts. This can probably be explained by the specificities of paid employment in these countries. For instance, in Jordan, the gap may be due to the large share of rural employees who work in the public sector (61 per cent of rural employees, compared with 26 per cent in urban areas). Besides, once the institutional sector of employment (public/private) and other observable characteristics are controlled for, rural and urban average wages are close (with an unexplained pay gap of –4 per cent). In the Occupied Palestinian Territory, the pay gap is nearly entirely unexplained, confirming the role of contextual factors such as the prevalence of cross-border rural workers who earn wages in neighbouring Israel.16

Figure 8. Average pay gap between rural and urban employees, by country, decomposed, 2019 or latest available year (percentage)

Note: For each country, the unexplained and explained components of the average pay gap are estimated using the Blinder–Oaxaca decomposition methodology outlined in box 3.

Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details.

Rural–urban pay gaps do not necessarily reflect discrepancies in the purchasing power of the wages between rural and urban areas, that is, the amount of goods and services that a wage unit can buy. Indeed, if prices are lower in rural areas than in urban ones, the data presented in figure 8 overestimate rural–urban gaps in terms of the purchasing power of wages. Empirically, several studies have compared rural and urban prices for defined baskets of goods and shown that rural prices tend to be lower. For example, in Indonesia, the food price differential computed using the data from the National Socio-Economic Survey ranged from 13 to 16 per cent during 1987–96, whereas previous studies implicitly estimated it to range from 28 to 52 per cent (Asra 1999). On the other hand, a study based on India’s National Sample Surveys found a significant rural–urban price gap, even though it narrowed between the two rounds of the survey under consideration, that is, between 1999/2000 and 2004/05 (Majumder, Ray and Sinha 2012).

In some countries, in order to assess the trends in prices according to the degree of urbanization, the national statistical office computes separate consumer price indices for rural and urban populations. Even if this methodology does not allow a direct assessment of the extent of the price gap between rural and urban areas, it enables a comparison of inflation in each of these spaces. India, for instance, is among the few countries that apply such a methodology. Using inflation data, the evolution of the purchasing power of rural Indian wages was found to be negative between April and November 2022 (box 4). In the United States of America, ad hoc estimates of rural and urban inflation showed that the purchasing power of the average wage increased less in rural than in urban areas between the fourth quarters of 2019 and 2021.

However, defining adequate price indices for specific populations, such as people living in rural areas, is challenging. Recent empirical analysis conducted in the United States has, for instance, highlighted that rural life creates additional costs that extend beyond prices. These are linked to the actual living experience in rural areas and the accessibility of goods and services, and they cannot be extrapolated from urban areas (Zimmerman, Rignall and McAlister 2023). In that regard, further research may therefore be necessary to fully do justice to the costs faced by rural residents.

Box 4. Examples of recent trends in rural real wages

In India, the Ministry of Statistics and Programme Implementation has since 2014 been releasing separate monthly consumer price indices (CPIs) for rural and urban areas, along with a combined nationwide index. The price data are collected from a selection of 1,114 urban markets and 1,181 villages covering all states and union territories (see, for example, India, MOSPI 2023). This information makes it possible to analyse the respective trends in inflation in urban and rural areas. Other countries, such as Bangladesh and Pakistan, also compute a CPI specific to rural areas.

Drawing on inflation data, together with the rural monthly wage index published by the Indian Labour Bureau, the Ministry of Finance has observed negative trends in the purchasing power of rural Indian wages in recent years. Thus, in its Economic Survey 2022–23, the Ministry highlighted a negative growth in real rural wages (that is, rural wages adjusted for inflation) due to elevated inflation between April and November 2022 (India, Ministry of Finance 2023).

Evidence of recent unfavourable developments for rural real wages has been found in other parts of the world as well. The United States Congressional Budget Office (CBO), for instance, has estimated that between the last quarter of 2019 and the last quarter of 2021 the purchasing power of the average wage increased in both rural and urban areas, but to a lesser degree in rural ones (United States, CBO 2022). For this analysis, the CBO specifically estimated the price growth in rural areas using the available CPI for urban consumers.

On average, rural female employees earn less than their male counterparts

Within rural areas, pay inequalities may also be observed across groups of workers. Specifically, rural female employees earn, on average, 5 per cent less per hour than their male counterparts across all the sampled countries (figure 9).17 However, the rural gender pay gap varies across countries, ranging from 30 per cent on average in low-income countries to –6 per cent on average in upper-middle-income countries. A closer analysis shows that the rural gender pay gap is negative in 22 countries from the sample, meaning that rural female employees in these countries earn, on average, more than their male counterparts.

A negative gender pay gap often indicates “selective” female labour market participation, especially in developing countries (ILO 2018c; ILO 2023b). Among the 22 countries with a negative rural gender pay gap, female rural employees indeed appear to be endowed with specific characteristics that distinguish them from their male counterparts. For instance, almost half of female rural employees have secondary education, compared with one third of rural male employees (see figure A3 in the appendix).

Figure 9. Gender pay gap in rural and urban areas, by country income group, 2019 or latest available year (percentage)

Note: Sierra Leone has been omitted as the number of observations in the survey is insufficient to estimate the average wage of rural female employees in that country.

Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year. See the appendix for more details.

However, the gender pay gap appears to be, on average, narrower in rural areas than in cities, except in low-income countries. Indeed, in the high- and middle-income countries sampled, the average urban gender pay gap is, respectively, 11 and 6 per cent (3 per cent in upper‑middle-income countries and 7 per cent in lower-middle-income ones). This result is in line with those from other studies focusing on gender pay gaps in income, including at the international level. For instance, a recent Eurostat study (2023) found that the gender gap in income is narrower in rural areas. A study based on French data similarly concluded that the gender pay gap is higher in urban areas, where the share of professional occupations is substantial (France, INSEE 2022b). According to that French study, the gender pay gap is wider among senior management and 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).

Figure 10. Average wage gap between rural and urban workers, in countries with a specific minimum wage for the agricultural sector, 2019 or latest available year (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.

Box 5. Employment incomes from self-employment in rural and urban areas in Angola and Brazil

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.

Figure B.5.1. Share of rural self-employed workers in each quintile of the distribution of income from 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-demographic 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.

Figure B.5.2. Averaage employment income gaps between rural and urban self-employed workers, 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-employment reaches 50 per cent (figure B.5.3).

Figure B.5.3. Gender employment income gap among rural and urban self-employed workers, 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.

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.

Box 6. International labour standards relevant to employment and wages in rural areas

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)

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).

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-discrimination 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 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

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.

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.

Since its promulgation, observers have identified some deficiencies in the execution of the Act – for instance, the unmet demand of rural households seeking employment in NREGS, shortcomings in citizen participation in planning and monitoring, insufficient awareness among the population and reports of corruption (Ehmke 2015; Jha and Gaiha 2013). However, over the years, the Government has issued guidelines to achieve greater transparency and accountability (India, Ministry of Rural Development 2020; 2022). Additionally, a third-party study on the implementation of NREGS, commissioned by the Government in 2020, concluded that, in general, these schemes had led to notable increases in the wages of rural workers (India, Ministry of Rural Development 2022).

Several other studies have found that, as NREGS were introduced and expanded, the rate of compliance with minimum wage regulations increased, the gap in rural wages between formal salaried workers and casual workers decreased and, similarly, the gender wage gaps in rural areas declined. Alongside other factors, the NREGS programme seems to have played an important role in these positive trends (ILO 2016c). Noting that the results varied across the national territory, the Indian Parliament’s Standing Committee on Rural Development argued that the Act in itself was well designed, but that its potential to transform the lives of rural populations depended on its implementation at the field level (India, SCRD 2013).

Austrian legislation on gender equality in rural areas

Within rural areas, inequalities can also be observed between male and female workers, with the latter having been discriminated against historically. Regulation of these issues in the agricultural sector is often lacking, as evidenced by gender wage gaps. It is therefore interesting to consider the case of Austria, where legislation has been enacted to try to address the problem.

The principle of equality is embedded in article 7 of the Austrian Federal Constitution (Bundes‑Verfassungsgesetz), which states that “all citizens are equal before the law” and rules out any privilege based on sex (among other characteristics). In 1998, an amendment to this article provided the constitutional basis for the implementation of gender mainstreaming by introducing the responsibility for authorities at all levels (federal, regional and local) to implement measures aimed at achieving equality between women and men.

Austria’s legislation on gender equality in the world of work dates back to the 1979 Act on the Equal Treatment of Women and Men with regard to Remuneration (applicable to the private sector), which provided for the establishment of an Equal Treatment Commission. The scope of this legislation has expanded considerably since then (Austria, Federal Chancellery, DGWE 2022). Nowadays, protection against discrimination in employment in the private sector (on the grounds of gender, ethnic affiliation, religion and belief, sexual orientation and age) is guaranteed by the 2004 Equal Treatment Act (Gleichbehandlungsgesetz).

Part IV of the Act lays down principles of equal treatment for the specific category of agricultural and forestry workers, using the same system as for all the other work sectors. Its stated aim is to ensure equality between women and men and to eliminate other forms of discrimination. Furthermore, the principle of equal treatment is defined as the prohibition of direct and indirect discrimination, in particular as regards the establishment of the employment relationship, the setting of remuneration, the granting of social benefits that do not constitute remuneration, training, career advancement, other working conditions and the termination of employment. This part of the Act dedicated to agricultural and forestry workers also deals with harassment (including sexual harassment), affirmative action by employers, the obligation to advertise jobs in a gender-neutral and non-discriminatory manner, and pay criteria, notably the principle of equal pay for equal work or for work recognized as equivalent.

The final provisions of the Act address compensation and the legal consequences of violation of the principle of equal treatment, which include legal proceedings before the labour and social courts. Furthermore, employees may file complaints with the Equal Treatment Commission and/or the Office of the Ombud for Equal Treatment. A proceeding before the Commission, which issues expert opinions on whether discrimination has occurred and if so, what measures are to be taken to end it, suspends all judicial deadlines. However, the courts are not bound by its findings. The Office of the Ombud for Equal Treatment can carry out independent investigations relating to discrimination and publish reports and recommendations on its findings. Additionally, the Office provides counselling services and information to employees and companies on enforcing the right to equal treatment(Austria, Federal Chancellery, DGWE 2022).

All provinces have relevant legislation and specialized bodies in place by now, even though these are structured differently throughout the country and vary considerably in terms of activity and visibility. Although a correlation with the 2004 Act has yet to be established, the statistics show that the gender wage gap in the “agriculture, forestry and mining” sector in Austria more than halved between 2005 and 2015 (Böheim et al. 2017).

***

Although it is difficult to assess their outcomes and there is room for further improvement, the measures taken in India and Austria testify to a determination to tackle rural inequalities and lay the foundation for future endeavours in this field.

Conclusions

This empirical study of a sample of countries at various levels of development has highlighted the existence of rural–urban gaps in labour market outcomes that cannot be fully explained by observed differences in the socio-demographic characteristics of rural and urban populations. 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 deficits in labour protection as well as low pay. In addition to insufficient working time, especially in the case of the self‑employed, limited rural employment income may also be due to low remuneration. Indeed, rural workers are, on average, paid 24 per cent less than their urban counterparts on an hourly basis, of which 12 percentage points are explained by rural–urban discrepancies in education, experience and occupational category. Developing countries exhibit a relatively larger gap, including also the unexplained part. Recent empirical evidence also points to relative deterioration of the purchasing power of wages in rural areas, which could further undermine rural livelihoods. In many countries, certain groups of rural workers are at greater disadvantage – notably women, who appear to earn, on average, less than men in rural areas.

However, institutional and regulatory frameworks can help in reducing labour market inequalities across the rural–urban divide. In that regard, international labour standards – such as the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), and the Indigenous and Tribal Peoples Convention, 1989 (No. 169) – can guide countries seeking to promote equal opportunities and treatment, including in wage employment. With regard to wages specifically, the Minimum Wage Fixing Convention, 1970 (No. 131), outlines a framework for ensuring that rural workers are covered by adequate minimum wages. Since rural employees are to be found towards the bottom of the wage distribution in their countries, minimum wage systems constitute a powerful lever for closing the rural–urban pay gap. Additionally, in many rural areas the promotion of collective bargaining could lead to improvements in wages and in the terms and conditions of employment that are tailored to the specificities of rural activities.

Further research and data collection would nonetheless be useful to improve understanding of the rural–urban divide in the labour market, especially in developing countries. From the point of view of income and wage-setting, such efforts should include a more comprehensive evaluation of the relative costs and prices faced by rural workers. The systematic and regular gathering of data on labour incomes by national institutions would be instrumental, too, in enhancing the assessment and monitoring of rural–urban disparities.

Appendix

Figure A1. Share of working-age population living in rural areas in the sampled countries, 2019 or latest available year (percentage).

Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year

Figure A2. Share of low-paid employees in rural areas in the sampled countries, 2019 or latest available year (percentage)

Source: Analysis based on ILO Harmonized Microdata collection (ILOSTAT), 2019 or latest available year.

Figure A3. Distribution of male and female rural employees according to their level of education in countries with a negative rural gender pay gap, 2019 or latest available year (percentage)

Note: This chart covers 22 countries in which the rural gender pay gap is negative: Bangladesh, Bolivia (Plurinational State of), Brazil, Colombia, Ecuador, Eswatini, Guatemala, Guyana, Honduras, Jordan, Lesotho, Madagascar, Mexico, Mongolia, Namibia, Nicaragua, Panama, Philippines, Republic of Moldova, Thailand, Uruguay, Zambia.

Source: Analysis based on ILO Microdata Repository (ILOSTAT), 2019 or latest available year.

Table A1. National data sources used to analyse rural and urban employment and wages

Country/Territory	Survey	Year	Survey used for figures B.2.1 and B.2.2 in box 2	Survey used for figure B.2.3 in box 2
Angola	Inquérito ao Emprego em Angola (Survey on Employment in Angola)	2019	Yes	Yes
Armenia	LFS	2019	No	Yes
Australia	Household, Income and Labour Dynamics in Australia Survey	2019	Yes	Yes
Bangladesh	LFS	2017	Yes	Yes
Benin	Enquête Harmonisée sur les Conditions de Vie des Ménages (Harmonized Survey of Household Living Conditions) 2018–19	2018	Yes	No
Bhutan	LFS	2019	Yes	No
Bolivia (Plurinational State of)	Encuesta de Hogares (Household Survey)	2018	Yes	No
Brazil	Pesquisa Nacional por Amostra de Domicílios (National Household Sample Survey)	2019	Yes	Yes
Cambodia	LFS	2019	Yes	Yes
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
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
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

The title of the questionnaire of the survey is "Enquête Nationale sur l'Emploi (ENE)", as on this Ivoirian website: https://www.economie-ivoirienne.ci/activites-sectorielles/emplois.html.

I'm not sure where does this ENSE comes from.

This ILOSTAT web page suggests that the official name may be “Enquête Nationale sur la Situation de l’Emploi”. Please double-check.

Note to typesetter: please ensure that this table note is included.

References

AIHW (Australian Institute of Health and Welfare). 2023. “Income and Finance of First Nations People”. 7 September 2023.

Asra, Abuzar. 1999. “Urban–Rural Differences in Costs of Living and Their Impact on Poverty Measures”. Bulletin of Indonesian Economic Studies 35 (3): 51–69.

Atal, Juan Pablo, Hugo Ñopo, and Natalia Winder. 2009. “New Century, Old Disparities: Gender and Ethnic Wage Gaps in Latin America”, IDB Working Paper Series No. IDB‑WP‑109. Inter-American Development Bank.

Austria, Federal Chancellery, DGWE (Directorate General for Women and Equality). 2022. Gender Equality in Austria: Milestones, Successes and Challenges.

Blinder, Alan S. 1973. “Wage Discrimination: Reduced Form and Structural Estimates”. The Journal of Human Resources 8 (4): 436–455.

Böheim, René, Marian Fink, Silvia Rocha-Akis, and Christine Zulehner. 2017. “Evaluation of the Gender Wage Gap in Austria”. Presentation given at the Institute for Advanced Studies Vienna, November 2017.

Bower, Jonathan, Sakshi Gupta, and Carlo Menon. 2021. “Is There an Urban Wage Premium in Rwanda?” International Growth Centre.

Carmo Dias Bueno, Maria do, and Ricardo Neves de Souza Lima. 2019. “The Degree of Urbanisation in Brazil”. Regional Statistics 9 (1): 72–84.

CEACR (Committee of Experts on the Application of Conventions and Recommendations). 2003. “Uruguay – Observation on the Application of Convention No. 131”.

———. 2004a. “Papua New Guinea – Direct Request on the Application of Convention No. 99”.

———. 2004b. “Uruguay – Observation on the Application of Convention No. 131”.

———. 2005. “Uruguay – Observation on the Application of Convention No. 131”.

———. 2008a. “Papua New Guinea – Direct Request on the Application of Convention No. 99”.

———. 2008b. “Albania – Direct Request on the Application of Convention No. 95”.

———. 2009. “Paraguay – Direct Request on the Application of Convention No. 95”.

———. 2012a. “Guatemala – Observation on the Application of Convention No. 131”.

———. 2012b. “Paraguay – Direct Request on the Application of Convention No. 95”.

———. 2016. “Bangladesh – Observation on the Application of Convention No. 87”.

———. 2017. “Guatemala – Direct Request on the Application of Convention No. 95”.

———. 2021. “Ecuador – Observation on the Application of Convention No. 110”.

———. 2022. “Ecuador – Direct Request on the Application of Convention No. 131”.

———. 2023a. “Tajikistan – Observation on the Application of Convention No. 100”.

———. 2023b. “Albania – Direct Request on the Application of Convention No. 111”.

———. 2023c. “Colombia – Direct Request on the Application of Conventions Nos. 81 and 129”.

Cheng, Zhiming, Fei Guo, Graeme Hugo, and Xin Yuan. 2013. “Employment and Wage Discrimination in the Chinese Cities: A Comparative Study of Migrants and Locals”. Habitat International 39: 246–255.

Cruz, Bruno de Oliveira, and Paolo Naticchioni. 2012. “Falling Urban Wage Premium and Inequality Trends: Evidence for Brazil”. Investigaciones Regionales 24: 91–113.

D’Alessandro, Cristina, David Levy, and Théodore Regnier. 2021. “Une nouvelle définition du rural pour mieux rendre compte des réalités des territoires et de leurs transformations”. National Institute of Statistics and Economic Studies (INSEE).

Duranton, Gilles. 2016. “Agglomeration Effects in Colombia”. Journal of Regional Science 56 (2): 210–238.

Duranton, Gilles, and Diego Puga. 2004. “Micro-Foundations of Urban Agglomeration Economies”. In Handbook of Regional and Urban Economics, Vol. 4, edited by J. Vernon Henderson and Jacques-François Thisse, 2063–2117. Amsterdam: Elsevier.

Ehmke, Ellen. 2015. “National Experiences in Building Social Protection Floors: India’s Mahatma Gandhi National Rural Employment Guarantee Scheme”, ILO Extension of Social Security Series No. 49.

Eurostat. 2023. “Gender Gap for Income Narrower in Rural Areas”. 6 March 2023.

Eyraud, François, and Catherine Saget. 2005. The Fundamentals of Minimum Wage Fixing. Geneva: ILO.

Fallah, Belal. 2018. “The Economic Response of Rural Areas to Local Supply Shock: Evidence from the Occupied West Bank”. Middle East Development Journal 10 (1).

FAO (Food and Agriculture Organization of the United Nations), IFAD (International Fund for Agricultural Development) and ILO. 2010. Gender Dimensions of Agricultural and Rural Employment: Differentiated Pathways out of Poverty – Status, Trends and Gaps.

France, INSEE (National Institute of Statistics and Economic Studies). 2022a. “Commune rurale”. https://www.insee.fr/fr/metadonnees/definition/c1902.

———. 2022b. Femmes et hommes, l’égalité en question.

Gollin, Douglas, David Lagakos, and Michael E. Waugh. 2014. “The Agricultural Productivity Gap”. The Quarterly Journal of Economics 129 (2): 939–993.

González‐Leonardo, Miguel, Antonio López‐Gay, Niall Newsham, Joaquín Recaño, and Francisco Rowe. 2022. “Understanding Patterns of Internal Migration during the COVID‐19 Pandemic in Spain”. Population, Space and Place 28 (6).

Hnatkovska, Viktoria, and Amartya Lahiri. 2013. “The Rural–Urban Divide in India”. International Growth Centre.

ILO. 1988. Equality in Employment and Occupation: General Survey by the Committee of Experts on the Application of Conventions and Recommendations. Report  III (Part 4B). International Labour Conference. 75th Session.

———. 1998. ILO Declaration on Fundamental Principles and Rights at Work. International Labour Conference, 86th Session.

———. 2003. Protection of Wages: General Survey by the Committee of Experts on the Application of Conventions and Recommendations. Report III (Part 1B). International Labour Conference, 91st Session.

———. 2007. Equality at Work: Tackling the Challenges – Global Report under the Follow-up to the ILO Declaration on Fundamental Principles and Rights at Work. Report I (B). International Labour Conference, 96th Session.

———. 2008. Resolution and conclusions concerning promotion of rural employment for poverty reduction. International Labour Conference. 97th Session.

———. 2012. Decent Work Indicators: Concepts and Definitions – ILO Manual: First Version.

———. 2016a. Non-Standard Employment around the World: Understanding Challenges, Shaping Prospects.

———. 2016b. Minimum Wage Policy Guide.

———. 2016c. “Minimum Wages and NREGS in India”. In ILO (2016b, 66).

———. 2018a. ILOSTAT Microdata Processing Quick Guide: Principles and Methods Underlying the ILO’s Processing of Anonymized Household Survey Microdata.

———. 2018b. Women and Men in the Informal Economy: A Statistical Picture, 3rd ed.

———. 2018c. Global Wage Report 2018/19: What Lies behind Gender Pay Gaps.

———. 2020a. “Rural and Urban Labour Markets: Different Challenges for Promoting Decent Work”, ILO Spotlight on Work Statistics No. 11.

———. 2020b. Global Wage Report 2020–21: Wages and Minimum Wages in the Time of COVID-19.

———. 2021a. World Social Protection Report 2020–22: Social Protection at the Crossroads – In Pursuit of a Better Future.

———. 2021b. The Situation of Workers of the Occupied Arab Territories. ILC.109/DG/APP.

———. 2022a. Decent Work Deficits among Rural Workers: Key Findings and Recommendations for Trade Unions.

———. 2022b. “Turning Moldova ‘White’ – The Moldovan Government Takes Bold Steps to Encourage the Formalization of Employment”. 6 December 2022.

———. 2023a. International Classification of Status in Employment (ICSE-18) Manual.

———. 2023b. World Employment and Social Outlook 2023: The Value of Essential Work.

ILO and OECD (Organisation for Economic Co-operation and Development). 2020. “Ensuring Better Social Protection for Self-Employed Workers”.

India, Ministry of Finance. 2023. Economic Survey 2022–23.

India, Ministry of Law and Justice. 2005. “The Mahatma Gandhi National Rural Employment Guarantee Act, 2005”.

India, Ministry of Rural Development. 2011. “Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM)”. https://aajeevika.gov.in/about/introduction.

———. 2020. “Guidelines/Framework for ‘Planning for Works and Preparation Labour Budget’ under the Mahatma Gandhi NREGA for the FY 2021–22”.

———. 2021. “Key Initiatives and Achievements of Ministry of Rural Development during the Year 2021”. https://pib.gov.in/PressReleasePage.aspx?PRID=1786672.

———. 2022. “Study to Assess the Impact of MGNREGS”. 29 March 2022. https://rural.nic.in/en/press-release/study-assess-impact-mgnregs.

———. 2023. “Participation of Women under Mahatma Gandhi National Rural Employment Guarantee Scheme”. 25 July 2023. https://rural.nic.in/en/press-release/participation-women-under-mahatma-gandhi-national-rural-employment-guarantee-scheme.

India, MOSPI (Ministry of Statistics and Programme Implementation). 2023. “Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the Month of December 2022”. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1890750.

India, SCRD (Standing Committee on Rural Development). 2013. “Forty-Second Report: on Implementation of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005”.

Jha, Raghbendra, and Raghav Gaiha. 2013. “India’s National Rural Employment Guarantee Scheme As It Is — Interpreting the Official Report”. Australian National University.

Jones, Patricia, Olivia D’Aoust, and Louise Bernard. 2017. “The Urban Wage Premium in Africa”. In Wage Inequality in Africa, edited by Shirley Johnson-Lans, 33–53. Cham: Springer International Publishing.

Majumder, Amita, Ranjan Ray, and Kompal Sinha. 2012. “Calculating Rural–Urban Food Price Differentials from Unit Values in Household Expenditure Surveys: A Comparison with Existing Methods and a New Procedure”. American Journal of Agricultural Economics 94 (5): 1218–1235.

Mion, Giordano, and Paolo Naticchioni. 2009. “The Spatial Sorting and Matching of Skills and Firms”. Canadian Journal of Economics / Revue canadienne d’économique 42 (1): 28–55.

Oaxaca, Ronald. 1973. “Male–Female Wage Differentials in Urban Labor Markets”. International Economic Review 14 (3): 693–709.

OECD (Organisation for Economic Co-operation and Development). 2014. “How Does Education Affect Employment Rates?” In Education at a Glance 2014: Highlights. Paris: OECD Publishing.

———. 2019. OECD Regional Outlook 2019: Leveraging Megatrends for Cities and Rural Areas.

———. 2021. “Pensions at a Glance 2021: Country Profiles – Brazil”.

Pega, Frank, Bálint Náfrádi, Natalie C. Momen, Yuka Ujita, Kai N. Streicher, Annette M. Prüss-Üstün, Alexis Descatha, Tim Driscoll, Frida M. Fischer, Lode Godderis, et al. 2021. “Global, Regional, and National Burdens of Ischemic Heart Disease and Stroke Attributable to Exposure to Long Working Hours for 194 Countries, 2000–2016: A Systematic Analysis from the WHO/ILO Joint Estimates of the Work-Related Burden of Disease and Injury”. Environment International 154 (September).

Population Reference Bureau. 2015. “Disparités entre milieu urbain et milieu rural en matière de santé et de développement”.

Rowe, Francisco, Alessia Calafiore, Daniel Arribas‐Bel, Krasen Samardzhiev, and Martin Fleischmann. 2023. “Urban Exodus? Understanding Human Mobility in Britain during the COVID‐19 Pandemic Using Meta‐Facebook Data”. Population, Space and Place 29 (1).

Schindlauer, Dieter. 2011. “Report on Measures to Combat Discrimination – Country Report 2010: Austria”. Report prepared for the European Network of Legal Experts in the Non‑Discrimination Field.

Singh, Pushpendra, and Falguni Pattanaik. 2020. “Unfolding Unpaid Domestic Work in India: Women’s Constraints, Choices, and Career”. Palgrave Communications 6, Art. No. 111.

Stepan, Matthias, and Quan Lu. 2016. “The Establishment of China’s New Type Rural Social Insurance Pension: A Process Perspective”. Journal of Current Chinese Affairs 45 (2): 113–147.

UN (United Nations). 2019. The Sustainable Development Goals Report 2019.

United States, CBO (Congressional Budget Office). 2022. “Price and Wage Growth in Rural Areas”. 31 January 2022.

United States Census Bureau. 2016. “Measuring America: Our Changing Landscape”. 8 December 2016.

Verstraten, Paul, Gerard Verweij, and Peter Zwaneveld. 2018. “Why Do Wages Grow Faster in Urban Areas? Sorting of High Potentials Matters”, CPB Discussion Paper No. 377. Netherlands Bureau for Economic Policy Analysis (CPB).

Weiss, Julia, and Christin Heinz-Fischer. 2022. “The More Rural the Less Educated? An Analysis of National Policy Strategies for Enhancing Young Adults’ Participation in Formal and Informal Training in European Rural Areas”. Youth 2 (3): 405–421.

Wilson, Daniel, and David Macdonald. 2010. “The Income Gap between Aboriginal Peoples and the Rest of Canada”. Canadian Centre for Policy Alternatives.

Xiang, Lili, and John Stillwell. 2023. “Rural–Urban Educational Inequalities and Their Spatial Variations in China”. Applied Spatial Analysis and Policy 16 (2): 873–896.

Zimmerman, Julie N., Karen Rignall, and Cameron McAlister. 2023. “The Enduring Price of Place: Revisiting the Rural Cost of Living”. Rural Sociology 88 (1): 252–280.

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.

Among the reasons for rural–urban productivity gaps are the economic opportunities that cities offer relative to rural areas. In that regard, urban agglomerations have been found to inherently contribute to increased productivity, for instance because they can facilitate the “sharing” of indivisible goods and facilities or the matching between workers and firms (Duranton and Puga 2004).

Under the hukou (“household registration”) system, individuals must register with local authorities, which entails certain limitations on domestic migration.

As specified by indicator 1.1.1 of the global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable Development, progress towards the achievement of Goal 1 is partly measured through the proportion of the population living below the international poverty line by geographical location (urban/rural).

For more information, see https://ilostat.ilo.org/about/data-collection-and-production/.

To group countries according to their level of income per capita, the World Bank classification corresponding to the year of collection of the survey data was used.

Cf. the ILOSTAT Microdata Processing Quick Guide (ILO 2018a). In the harmonized microdata sets created by the ILO from national surveys, the name of the variable used to identify rural areas is “ilo_geo”, which corresponds to geographical coverage.

The definition changed in 2020 (France, INSEE 2022a).

For example, do Carmo Dias Bueno and Neves de Souza Lima (2018) show that a harmonized methodology for determining the degree of urbanization proposed by the European Commission’s Directorate-General for Regional and Urban Policy and the OECD overlaps with the IBGE methodology for approximately 70 per cent of the Brazilian municipalities.

People living in camps in the Occupied Palestinian Territory were not included in the analysis, as it was not possible to assign them a geographical area, whether urban or rural.

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).

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.

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.

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).

Low pay was statistically defined in ILO (2012).

The observable characteristics taken into account in the decomposition are age, education level, institutional sector (public/private), occupation and the number of working hours of each employee (see box 3 for more details).

A substantial proportion of the Palestinian population work in Israel, often in the construction sector, through a work permit system that enables the employment of workers by registered employers (ILO 2021b). In addition, rural workers have been found to make up the majority of commuters (Fallah 2018).

The gender pay gap corresponds to the gap between the average wage of female employees and the average wage of male employees, expressed as a percentage of the average wage of male employees.

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).

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.

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.

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”.

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)).

For a comprehensive overview of international labour standards applicable to rural work, see ILO (2008), Annex II.

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.

Just like the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), Convention No. 100 is also one of the eight fundamental Conventions.

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).

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.

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.

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.

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.

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.

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).

CBO	Congressional Budget Office (of the United States of America)
CEACR	Committee of Experts on the Application of Conventions and Recommendations (of the ILO)
CPI	Consumer Price Index
IBGE	Brazilian Institute of Geography and Statistics
ICLS	International Conference of Labour Statisticians
ICSE	International Classification of Status in Employment
INSEE	National Institute of Statistics and Economic Studies (of France)
ISCO	International Standard Classification of Occupations
NREGS	National Rural Employment Guarantee Schemes (in India)
OECD	Organisation for Economic Co-operation and Development