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Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach

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  • Carlos Gradín

Abstract

Despite the relevance of geographical disparities in India, earnings inequality occurs mostly within states, but with a broad range of variability in its levels. We investigate the sources of such variability using RIF decompositions of the inequality gaps between most populous states and India. Our results point to substantial compositional effects associated with cross-state variability in the extent of high-skilled formal employment outside the farm and construction sectors, and along the degree of urbanization and some demographic factors. Cross-state differences in conditional earnings structures, however, turn out to be crucial, especially regarding the different degree of earnings stratification by caste in each state.

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  • Carlos Gradín, 2018. "Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach," WIDER Working Paper Series 024, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2018-24
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    1. Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach
      by maximorossi in NEP-LTV blog on 2018-05-17 20:20:56

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