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Accounting for Inequality in India: Evidence from Household Expenditures

Author

Listed:
  • Cain, J. Salcedo

    (Asian Development Bank)

  • Hasan, Rana

    (Asian Development Bank)

  • Magsombol, Rhoda

    (Asian Development Bank)

  • Tandon, Ajay

    (World Bank)

Abstract

The paper utilizes consumption expenditure data from India's National Sample Survey to shed light on the evolution of inequality between 1983 and 2004. Various measures of inequality show that inequality levels were relatively stable between 1983 and 1993, but increased between 1993 and 2004. However, the increases in inequality have not precluded reductions in poverty. They are also more of urban phenomena and can be accounted for by increased labor market returns to college education, especially among professional, technical, and managerial occupations. These findings are consistent with the importance of services, especially modern services, in driving economic growth in India. They also suggest that for the benefits of growth to be spread wider, greater dynamism in Indian agriculture and manufacturing will be essential.

Suggested Citation

  • Cain, J. Salcedo & Hasan, Rana & Magsombol, Rhoda & Tandon, Ajay, 2008. "Accounting for Inequality in India: Evidence from Household Expenditures," ADB Economics Working Paper Series 117, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0117
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    More about this item

    Keywords

    consumption expenditure; economic growth; India; inequality; poverty;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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