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Minimum Wage Law for Domestic Workers: Impact Evaluation of the Indian Experience

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Abstract

We conduct an impact evaluation of the minimum wage legislation for domestic workers that was introduced in four states in India over the period of 2004-2012. Combining the matching and differencein-difference estimation strategies we estimate both the short-run and long-run impacts of the legislation on real wages and on employment opportunities. Our results show a positive impact of the legislation on real wages in the short-run, albeit of very small magnitude.However, the legislation seems to have no impact on real wages in the long-run. Further, the legislation did not seem to have had any impact on the extensive margin in terms of employment opportunities or the probability of being employed as a domestic worker in both the short and long run. Our conclusion is that minimum wage legislation for domestic workers need not improve the living standards of workers unless accompanied by strong enforcement mechanisms. To our knowledge, this is the first attempt at quantitatively evaluating the impact of minimum wage legislation for domestic workers in India.

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  • Rohan Ravindra Gudibande & Arun Jacob, 2014. "Minimum Wage Law for Domestic Workers: Impact Evaluation of the Indian Experience," CFD Working Papers 05-2015, Centre for Finance and Development, The Graduate Institute, revised 07 Apr 2015.
    • Handle: RePEc:gii:cfdwpa:cfdwp05-2015
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    Cited by:

    1. Joana Simões de Melo Costa, 2016. "Effects of domestic worker legislation reform in Brazil," Working Papers 149, International Policy Centre for Inclusive Growth.

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    More about this item

    Keywords

    wages; minimum wages; labour demand; domestic workers; India; trade unions; unemployment; informal sector;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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