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Wage Gap and Employment Status in Indian Labour Market - Quantile Based Counterfactual Analysis

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  • Panchanan Das

    () (Department of Economics, University of Calcutta)

Abstract

This study examines the extent of wage gap between workers in permanent and temporary jobs but in roughly similar occupation types by evaluating the impact of workers' characteristics and education. The differential effects of the covariates on wage gap at different locations of the wage distribution are estimated by applying quantile regression model. After estimating the differential effects the relevance of glass ceiling or sticky floor hypothesis has been tested with Indian data. The wage gap between temporary and permanent employment is decomposed into endowment effect based on the difference in labour market characteristics and coefficient effect based on the difference in returns for the same characteristics. The study observes that the wage gap between temporary and permanent workers is wider at the upper tail of the distribution not rejecting the glass ceiling hypothesis. The decomposition analysis suggests that the wage gap presents in the Indian labour market primarily because of discrimination measured by the coefficients effects.

Suggested Citation

  • Panchanan Das, 2018. "Wage Gap and Employment Status in Indian Labour Market - Quantile Based Counterfactual Analysis," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 117-134, December.
  • Handle: RePEc:ana:journl:v:4:y:2018:i:2:p:117-134
    DOI: 10.22440/wjae.4.2.4
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    More about this item

    Keywords

    Employment Structure; Quantile Regression; Earnings Inequality; India;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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