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Wage inequality in Indian manufacturing: Is it trade, technology or labour regulations?

  • K.V. Ramaswamy

    ()

    (Indira Gandhi Institute of Development Research)

This paper investigates the question of wage inequality in Indian manufacturing in the years of trade and investment liberalization. The objective is to test the hypothesis of skill biased technological change (SBTC) due to capital-skill complementarity and the impact of labour regulations on wage inequality between skilled and unskilled labour. The skill-wage bill share equation is estimated for a panel of 46 three-digit industries spanning the period 1981-2004 followed by 113 four-digit industries panel covering the period 1993 to 2004.The econometric results suggest the positive contribution of change in output (scale effect), capital-output ratio and contract-worker intensity to wage inequality in Indian manufacturing.

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File URL: http://www.igidr.ac.in/pdf/publication/WP-2008-021.pdf
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Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2008-021.

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Length: 37 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:ind:igiwpp:2008-021
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