Wage Inequality and Job Insecurity among Permanent and Contract Workers in India: Evidence from Organized Manufacturing Industries
AbstractSince the early 1990s, the employment structure of organised manufacturing industries in India has undergone substantial changes with the steep rise in the use of contract workers in place of permanent workers. This process has led to increased wage inequality, discrimination as well as the concern of job insecurity in the labour market. We focus on the wage inequality between permanent and contract workers, since contract workers earn substantially lower wages than their counterpart. The study uses data at the individual level from a recent labour survey of organised manufacturing industries in India. The lower wage earned by contract worker is largely due to cost cutting, rather than differences in labour productivity. The issue of job insecurity has been modeled in form of a binary logistic model. The factors affecting job security are divided as productivity related attributes like level of education, skill etc. and institutional attributes such as labour market rules and regulations, union membership etc. Contrary to the general expectation the study finds that permanent workers are more concern of job insecurity than contract workers.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 88.
Length: 31 pages
Date of creation: 25 Apr 2006
Date of revision:
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Job Security; Discrimination; Wages; Decomposition; Permanent and Contract Workers; Manufacturing;
Other versions of this item:
- Amit K Bhandari & Almas Heshmati, 2008. "Wage Inequality and Job Insecurity Among Permanent and Contract Workers in India: Evidence from Organized Manufacturing Industries," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 80-111, January.
- Bhandari, Amit Kumar & Heshmati, Almas, 2006. "Wage Inequality and Job Insecurity among Permanent and Contract Workers in India: Evidence from Organized Manufacturing Industries," IZA Discussion Papers 2097, Institute for the Study of Labor (IZA).
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-29 (All new papers)
- NEP-CWA-2006-04-29 (Central & Western Asia)
- NEP-LAB-2006-04-29 (Labour Economics)
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