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Accounting for Wage Inequality in India

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  • Puja Vasudeva Dutta

    ()
    (National Council of Applied Economic Research, New Delhi)

Abstract

This paper investigates the evolution and structure of wage inequality among adult male workers engaged in regular and casual wage employment in India during a period of radical economic change. The analysis exploits data from nationally representative employment surveys and uses decomposition techniques to examine the role played by educational achievement and industry affiliation. This paper finds that there are striking differences for the two groups of workers. Wage inequality rose between 1983 and 1999 among regular workers but fell among casual workers. While human capital (as embodied in age and education) is one of the major factors explaining both the level of and change in regular wage inequality, geographic location is the key determinant of casual wage inequality. Industry affiliation plays an equally important role for both sets of workers. These are also consistently the most important contributors to changes in inequality though the directional effects differ among the different sets of workers.

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Bibliographic Info

Paper provided by Poverty Research Unit at Sussex, University of Sussex in its series PRUS Working Papers with number 29.

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Length: 31 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:pru:wpaper:29

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Postal: School of Social Sciences and Cultural Studies, Falmer, Brighton BN1 9SN
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Web page: http://www.sussex.ac.uk/Units/PRU/
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Related research

Keywords: India; wage inequality; inequality decomposition; segmented labour market;

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References

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  1. Puja Vasudeva Dutta, 2004. "Trade Protection and Inter-industry Wages in India," PRUS Working Papers 27, Poverty Research Unit at Sussex, University of Sussex.
  2. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, World Bank Group, vol. 11(1), pages 33-57, January.
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  4. Jorge Saba Arbache & Andy Dickerson & Francis Green, 2004. "Trade Liberalisation and Wages in Developing Countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F73-F96, 02.
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Citations

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Cited by:
  1. Chris SAKELLARIOU, 2009. "Changing Wage Distributions and the Evolution of Wage Inequality in Indonesia:1994 – 2007," Economic Growth centre Working Paper Series 0906, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
  2. Sonja Fagernäs, 2006. "How do family ties, boards and regulation affect pay at the top? Evidence for Indian CEOs," ESRC Centre for Business Research - Working Papers wp335, ESRC Centre for Business Research.
  3. Rubiana Chamarbagwala & Gunjan Sharma, 2008. "Industrial Deregulation, Skill Upgrading, and Wage Inequality in India," Caepr Working Papers 2008-002, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  4. Azam, Mehtabul, 2009. "Changes in Wage Structure in Urban India 1983-2004: A Quantile Regression Decomposition," IZA Discussion Papers 3963, Institute for the Study of Labor (IZA).
  5. Chamarbagwala, Rubiana & Sharma, Gunjan, 2011. "Industrial de-licensing, trade liberalization, and skill upgrading in India," Journal of Development Economics, Elsevier, vol. 96(2), pages 314-336, November.
  6. Pieters, Janneke, 2010. "Growth and Inequality in India: Analysis of an Extended Social Accounting Matrix," World Development, Elsevier, vol. 38(3), pages 270-281, March.
  7. Azam, Mehtabul, 2009. "India's Increasing Skill Premium: Role of Demand and Supply," IZA Discussion Papers 3968, Institute for the Study of Labor (IZA).
  8. Puja Vasudeva Dutta, 2006. "Returns to Education: New Evidence for India, 1983-1999," Education Economics, Taylor & Francis Journals, vol. 14(4), pages 431-451.
  9. Harris, Richard G. & Robertson, Peter E., 2013. "Trade, wages and skill accumulation in the emerging giants," Journal of International Economics, Elsevier, vol. 89(2), pages 407-421.
  10. Ojha, Vijay P. & Pradhan, Basanta K. & Ghosh, Joydeep, 2013. "Growth, inequality and innovation: A CGE analysis of India," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 909-927.
  11. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632, January.
  12. Sahoo, Amarendra & ten Raa, Thijs, 2012. "Wage–productivity differentials and Indian economic efficiency," Economic Modelling, Elsevier, vol. 29(2), pages 341-348.
  13. Saccone Donatella, 2011. "Potenze economiche emergenti: Cina e India a confronto.Istruzione e diseguaglianze," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201113, University of Turin.
  14. Mukherjee, Dipa, 2007. "A Decade of Economics Reforms: Whither Employment?," MPRA Paper 12753, University Library of Munich, Germany, revised Mar 2008.
  15. Chaudhuri, Shubham & Ravallion, Martin, 2006. "Partially awakened giants : uneven growth in China and India," Policy Research Working Paper Series 4069, The World Bank.

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