Bonded Labour or What Else? A Case Study in Tamil Nadu, India

Debt bondage is the focus of an international struggle for its abolition. Yet the literature finds that, in certain circumstances, the credit-for-work contracts behind debt bondage are mutually beneficial to both employer and employee. We take on an empirical study in south India to assess whether choosing credit, which can raise a risk of dependence on the lender and therefore a risk of debt bondage, is a choice made to prevent other forms of risk, especially financial risk and the risk of violence. We find this to be the case in our study. From a policy point of view, the abolition of debt bondage in these circumstances could drive up the very same forms of risk against which households seek to guard. In this context, providing alternatives employment solutions to rural workers is a priority. Copyright (c) 2016 John Wiley & Sons, Ltd.