Wage differentials between the public and private sector in India
AbstractThe authors use 1993-94 and 1999-2000 India Employment and Unemployment surveys to investigate wage differentials between the public and private sectors as well as workers'decisions to join a particular sector. To obtain robust estimates of the wage differential, they apply three econometric techniques each relying on a different set of assumptions about the process of job selection. All three methods show that differences in wages between public sector workers and workers in the formal-private and informal-casual sectors are positive and high. Estimates show that, on average, the public sector premium ranges between 62 percent and 102 percent over the private-formal sector, and between 164 percent and 259 percent over the informal-casual sector, depending on the choice of methodology. The authors'review of wage differentials (estimated using similar methodologies) across the world shows that India has one of the largest differentials between wages of public workers and workers in the formal private sector. The wage differentials in India tend to be higher in rural as compared with urban areas, and are higher among women than among men. The wage differential also tends to be higher for low-skilled workers. There is considerable evidence of an increase in the wage differential between 1993-94 and 1999-2000.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3574.
Date of creation: 01 Apr 2005
Date of revision:
Environmental Economics&Policies; PovertyAssessment; Banks&Banking Reform; Health Monitoring&Evaluation; Work&Working Conditions;
Other versions of this item:
- Elena Glinskaya & Michael Lokshin, 2007. "Wage differentials between the public and private sectors in India," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(3), pages 333-355.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
- NEP-CWA-2005-12-14 (Central & Western Asia)
- NEP-DEV-2005-12-14 (Development)
- NEP-LAB-2005-12-14 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Revising the wages of civil servants
by Ajay Shah in Ajay Shah's blog on 2006-03-09 16:01:00
- What does it mean when a million people apply for a thousand jobs?
by Ajay Shah in Ajay Shah's blog on 2010-03-21 18:38:00
- What Does it Mean When a Million People Apply for a Thousand Jobs?
by Ajay Shah in Citizen Economists on 2010-03-22 16:10:11
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