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Minimum Wages for Domestic Workers: Impact Evaluation of the Indian Experience

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  • Gudibande, Rohan Ravindra
  • Jacob, Arun

Abstract

The paper explores the labor market effect of minimum wage legislations in the informal sector for a developing country. The paper conducts an impact evaluation of the minimum wage legislation for domestic workers introduced in four states in India over the period of 2004-2012. Combining matching procedures with difference-in-difference, the paper estimates both the short-run and the long-run impact of the legislation on real wages and employment opportunities. Results show a positive impact of the legislation on real wages in the short-run, with no significant impact 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 over the entire period. Available evidence, in line with theoretical predictions, point towards a weak enforcement of the legislation as the driving factor of observed results.

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  • Gudibande, Rohan Ravindra & Jacob, Arun, 2018. "Minimum Wages for Domestic Workers: Impact Evaluation of the Indian Experience," GLO Discussion Paper Series 294, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:294
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    More about this item

    Keywords

    wages; minimum wages; domestic workers; unemployment; informal sector;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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