IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v19y2007i3p333-355.html
   My bibliography  Save this article

Wage differentials between the public and private sectors in India

Author

Listed:
  • Elena Glinskaya

    (The World Bank, Washington, District of Columbia, USA)

  • Michael Lokshin

    (The World Bank, Washington, District of Columbia, USA)

Abstract

This study uses 1993-94 and 1999-2000 rounds of India Employment and Unemployment survey to investigate wage differentials between the public and private sectors. To obtain robust estimates of the wage differential, we apply three econometric techniques each relying on a different set of assumptions about the process of job selection and wage formation. 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. On average, the public sector premium ranges between 62 and 102 per cent over the private-formal sector, and between 164 and 259 per cent over the informal-casual sector, depending on the choice of methodology. The wage differentials in India tend to be higher in rural as compared to 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 1993-1994 and 1999-2000. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:jintdv:v:19:y:2007:i:3:p:333-355
    DOI: 10.1002/jid.1326
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/jid.1326
    File Function: Link to full text; subscription required
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 205-220, May.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
    5. Bales, Sarah & Rama, Martin, 2001. "Are public sector workers underpaid? - Appropriate comparators in a developing country," Policy Research Working Paper Series 2747, The World Bank.
    6. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers 0237, National Bureau of Economic Research, Inc.
    7. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
    8. François Bourguignon & Martin Fournier & Marc Gurgand, 2002. "Selection Bias Correction Based on the Multinomial Logit Model," Working Papers 2002-04, Center for Research in Economics and Statistics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 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 23:38:00
    2. What Does it Mean When a Million People Apply for a Thousand Jobs?
      by Ajay Shah in Citizen Economists on 2010-03-22 21:10:11

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erik Monsen & Prashanth Mahagaonkar & Christian Dienes, 2012. "Entrepreneurship in India: the question of occupational transition," Small Business Economics, Springer, vol. 39(2), pages 359-382, September.
    2. Phil Lewis & Bilal Rafi, 2014. "Earnings of Indian Male Migrants in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 17(3), pages 257-275.
    3. Nguyen Danh, Hoang Long, 2002. "public-private sector wage differentials for males and females in vietnam," MPRA Paper 6583, University Library of Munich, Germany.
    4. Saha, Sarani & Roy, Poulomi & Kar, Saibal, 2014. "Public and private sector jobs, unreported income and consumption gap in India: Evidence from micro-data," The North American Journal of Economics and Finance, Elsevier, vol. 29(C), pages 285-300.
    5. Anuneeta Mitra, 2016. "Education and earning linkages of regular and casual workers in India: a quantile regression approach," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 18(1), pages 147-174, October.
    6. Clément Imbert, 2011. "Decomposing wage inequality: Public and private sectors in Vietnam 1993-2006," Working Papers halshs-00564653, HAL.
    7. Abhijit Banerjee & Esther Duflo & Maitreesh Ghatak & Jeanne Lafortune, 2013. "Marry for What? Caste and Mate Selection in Modern India," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 33-72, May.
    8. Jelena Lausev, 2014. "WHAT HAS 20 YEARS OF PUBLIC–PRIVATE PAY GAP LITERATURE TOLD US? EASTERN EUROPEAN TRANSITIONING vs. DEVELOPED ECONOMIES," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 516-550, July.
    9. Barton, Nicholas & Bold, Tessa & Sandefur, Justin, 2017. "Measuring Rents from Public Employment: Regression discontinuity evidence from Kenya," CEPR Discussion Papers 12105, C.E.P.R. Discussion Papers.
    10. Nicholas Barton & Tessa Bold & Justin Sandefur, 2017. "Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457," Working Papers 457, Center for Global Development.
    11. Clément Imbert, 2011. "Decomposing wage inequality: Public and private sectors in Vietnam 1993-2006," PSE Working Papers halshs-00564653, HAL.
    12. Tatiana Karabchuk, 2012. "Part-time and temporary workers in Russia: winners or losers?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(1), pages 23-39, March.
    13. Stephen Howes & Rinku Murgai & Marina Wes, 2004. "Expenditure Implications of India's State-level Fiscal Crisis," ASARC Working Papers 2004-15, The Australian National University, Australia South Asia Research Centre.
    14. Ibrahim Mohamed Abdalla & Mohammed A. Al-Waqfi & Nasri Harb & Rafiq H. Hijazi & Taoufik Zoubeidi, 2010. "Labour Policy and Determinants of Employment and Wages in a Developing Economy with Labour Shortage," LABOUR, CEIS, vol. 24(2), pages 163-177, June.
    15. Ma, Yuanyuan & Walsh, Patrick Paul, 2013. "Party Membership and State Jobs in Urban China," IZA Discussion Papers 7643, Institute for the Study of Labor (IZA).
    16. Azam, Mehtabul & Prakash, Nishith, 2010. "A Distributional Analysis of the Public-Private Wage Differential in India," IZA Discussion Papers 5132, Institute for the Study of Labor (IZA).
    17. Menon, Nidhiya & Rodgers, Yana van der Meulen, 2009. "International Trade and the Gender Wage Gap: New Evidence from India's Manufacturing Sector," World Development, Elsevier, vol. 37(5), pages 965-981, May.
    18. Aslam, Monazza & Kingdon, Geeta, 2009. "Public-private sector segmentation in the Pakistani labour market," Journal of Asian Economics, Elsevier, vol. 20(1), pages 34-49, January.
    19. Ajay Shah, 2008. "New issues in Indian macro policy," Working Papers id:1478, eSocialSciences.
    20. Mizala, Alejandra & Romaguera, Pilar & Gallegos, Sebastián, 2011. "Public–private wage gap in Latin America (1992–2007): A matching approach," Labour Economics, Elsevier, vol. 18(S1), pages 115-131.
    21. Alejandra Mizala & Pilar Romaguera & Sebastian Gallegos, 2010. "Public-Private Wage Gap In Latin America (1999-2007): A Matching Approach," Documentos de Trabajo 268, Centro de Economía Aplicada, Universidad de Chile.
    22. Mehtabul Azam & Nishith Prakash, 2015. "A Distributional Analysis of Public–Private Wage Differential in India," LABOUR, CEIS, vol. 29(4), pages 394-414, December.
    23. Louis Christofides & Maria Michael, 2013. "Exploring the public-private sector wage gap in European countries," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-53, December.
    24. Hasan, Rana & Jandoc, Karl Robert L., 2009. "Quality of Jobs in the Philippines: Comparing Self-Employment with Wage Employment," ADB Economics Working Paper Series 148, Asian Development Bank.

    More about this item

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:19:y:2007:i:3:p:333-355. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.