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Trade and Inequality in India

  • Pravin Krishna
  • Guru Sethupathy

To study the effects of the dramatic economic reforms undertaken in India in the early 1990s on inequality, this paper examines Theil inequality as well as other inequality measures constructed using Indian household expenditure survey data from 1988-2005. Overall inequality shows some variation over the period, falling between 1988 and 1994, rising between 1994 and 2000, but falling again by 2005. The evolution of inequality in the post reform period is thus non-monotonic. A similar inequality trend is seen within most Indian states over this time period. Finally, the change in inequality across households within states is found to be uncorrelated with the change in state-level measures of tariff and non-tariff protection.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17257.

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Date of creation: Jul 2011
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Publication status: published as “Trade and Income Inequality in India ,” with Guru Sethupathy, in India: Trade, Poverty, Inequality and Democracy , Bhagwati and Panagariya editors, Oxford University Press,
Handle: RePEc:nbr:nberwo:17257
Note: ITI
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  1. Simon Kuznets, 1950. "Shares of Upper Income Groups in Income and Savings," NBER Books, National Bureau of Economic Research, Inc, number kuzn50-1, October.
  2. Nirvikar Singh & Laveesh Bhandari & Aoyu Chen & Aarti Khare, 2004. "Regional Inequality in India: A Fresh Look," Development and Comp Systems 0412006, EconWPA.
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