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Minimum wages and changing wage inequality in India

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  • Saloni Khurana
  • Kanika Mahajan
  • Kunal Sen

Abstract

Using nationally representative data on employment and earnings, this paper documents a fall in wage inequality in India over the last two decades. It then examines the role played by increasing minimum wages for the lowest skilled workers in India in contributing to the observed decline. Exploiting regional variation in changes in minimum wages over time in the country, we find that an increase in minimum wages by one per cent led to an increase in wages for workers in the lowest quintile by 0.17 per cent.

Suggested Citation

  • Saloni Khurana & Kanika Mahajan & Kunal Sen, 2023. "Minimum wages and changing wage inequality in India," WIDER Working Paper Series wp-2023-67, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2023-67
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    References listed on IDEAS

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    More about this item

    Keywords

    Minimum wage; Wage inequality; India; Employment;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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