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The Effect of Information Technology on Wage Inequality: Evidence from Indian Manufacturing Sector

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  • Vinoj Abraham

Abstract

A persistent widening of skill based wage inequality in the Indian Organised Manufacturing sector has been reported by many researchers. Two main hypotheses had been tested in developed economies to explain such a phenomenon; an inter-sectoral shift in demand structure and an intra-sectoral shift in production technology. A decomposition of the change in wage share of skilled workers showed that sector bias explained very little of the changes in the share of skilled worker wages while more than 85 percent of the changes occurred within industries, giving support to the argument of changing skill mix within industries, rather than between industries. [Working Paper No. 437]

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Bibliographic Info

Paper provided by eSocialSciences in its series Working Papers with number id:3180.

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Date of creation: Nov 2010
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Handle: RePEc:ess:wpaper:id:3180

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Keywords: Skill Biased Technological Change; Wage Inequality; Information Technology; Indian Manufacturing sector;

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  1. Berman, E. & Bound, J. & Machin, S., 1997. "Implications of Skill-Biased Technological Change: International Evidence," Papers, Centre for Economic Performance & Institute of Economics 25, Centre for Economic Performance & Institute of Economics.
  2. Attanasio, Orazio & Goldberg, Pinelopi K. & Pavcnik, Nina, 2004. "Trade reforms and wage inequality in Colombia," Journal of Development Economics, Elsevier, Elsevier, vol. 74(2), pages 331-366, August.
  3. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers, Institute for Fiscal Studies W98/04, Institute for Fiscal Studies.
  4. Donald J. Robbins, 1996. "Evidence on Trade and Wages in the Developing World," OECD Development Centre Working Papers 119, OECD Publishing.
  5. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 253-90, February.
  6. K.J Joseph & Vinoj Abraham, 2007. "Information technology and productivity: Evidence from India's manufacturing sector," Centre for Development Studies, Trivendrum Working Papers, Centre for Development Studies, Trivendrum, India 389, Centre for Development Studies, Trivendrum, India.
  7. Acemoglu, Daron, 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1707, C.E.P.R. Discussion Papers.
  8. David Card & Francis Kramarz & Thomas Lemieux, 1999. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 32(4), pages 843-877, August.
  9. Vijay Korra, 2010. "Nature and Characteristics of Seasonal Labour Migration : A Case Study in Mahabubnagar District of Andhra Pradesh," Working Papers id:3182, eSocialSciences.
  10. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 91-134, February.
  11. K.V. Ramaswamy, 2008. "Wage Inequality in Indian Manufacturing - Is it Trade, Technology or Labour Regulations?," Labor Economics Working Papers 22361, East Asian Bureau of Economic Research.
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