Wage Inequality

Borooah, Vani (2019): Wage Inequality. Published in: Disparity and Discrimination in Labour Market Outcomes in India No. Palgrave Macmillan (July 2019): pp. 163-196.

Abstract

This chapter considers wage inequality in India at a point in time (2011–12) with particular reference to inequality in wages between male and female workers and between workers from different social groups — the Scheduled Tribes, the Scheduled Cates, the non-Muslim Other Backward Classes, Muslims, and the Forward Castes. The thrust of the analysis in this chapter is to decompose the difference in wages between men and women, and between the Forward Castes and the other social groups, into a part that can be “explained” by employer bias and that which is due to differences in employee attributes. The analysis of this chapter extends earlier analyses of wage inequality in India to include social groups; methodologically, it seeks an explanation for inter-group inequality in terms of employer bias and (differences in) employee attributes. The analysis in this chapter uses data from two independent sources to analyse the phenomenon of inter-group wage inequality: the 68th round of the National Sample Survey pertaining to the period July 2011–June 2012 and the Indian Human Development Survey pertaining to 2011.

• Item Type: MPRA Paper
• Language: English
• Keywords: India, Wages, Inequality
• Subjects: D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs; J - Labor and Demographic Economics > J7 - Labor Discrimination

References

Anand, S. and A. Sen (1997), “Concepts of Human Development and Poverty: A Multidimensional Perspective”, Human Development Report 1997 Papers, New York: UNDP.

Atkinson, A.B. (1970), “On the Measurement of Inequality”, Journal of Economic Theory 2: 244–263.

Blinder, A.S. (1973), “Wage Discrimination: Reduced Form and Structural Estimates”, Journal of Human Resources, 8: 436–455.

Chamarwagwala, R. (2006), “Economic Liberalisation and Wage Inequality in India”, World Development, 12: 1997–2015.

Cowell, F. and Jenkins, S. (1995), “How Much Inequality Can We Explain? A Methodology and an Application to the United States”, Economic Journal, 105: 421–430.

Das, P. (2012), “Wage Inequality in India: Decomposition by Sector, Gender, and Activity Status”, Economic and Political Weekly, 47: 58–64.

Dutta, P. (2005), “Accounting for Wage Inequality in India”, The Indian Journal of Labour Economics, 48: 273–296.

Galbraith, J., Roy Chowdhury, D. and Srivastava, S. (2004), Pay Inequality in the Indian Manufacturing Sector, 1979–98, Inequality Project Working Paper, Austin, TX: University of Texas.

Glinskaya, E. and Lokshin, M. (2005), Wage Differentials Between the Public and Private Sectors in India, Policy Research Working Paper Series 3574, Washington DC: The World Bank.

Kijima, Y. (2006), “Why did Wage Inequality Increase? Evidence from Urban India 1983–99”, Journal of Development Economics, 81: 97–117.

Long, J.S. and Freese, J. (2014), Regression Models for Categorical Dependent Variables using Stata, College Station, TX: Stata Press.

Mazumdar, D. and Sarkar, S. (2008), Globalisation, Labour Markets, and Inequality in India, London: Routledge.

Mazumdar, D., Sarkar, S. and Mehta, B.S. (2017a), “Inequality in India-I”, Economic and Political Weekly, 52: 47–56.

Mazumdar, D., Sarkar, S, and Mehta, B.S. (2017b), “Inequality in India-II: The Wage Sector”, Economic and Political Weekly, 52: 58–66.

Oaxaca, R. (1973), “Male–Female Wage Differentials in Urban Labor Markets”, International Economic Review, 14: 693–709.

Sarkar, S. and Mehta, B.S. (2010), “Income Inequality in India: Pre- and Post-Reform Periods”, Economic and Political Weekly, 45: 45–55.

Sen, A.K. (1976), “Real National Income”, Review of Economic Studies 43: 19–39.

Sen, A.K. (1993), “Capability and Well-Being”, in M. Nussbaum and A.K. Sen (eds), The Quality of Life, Clarendon Press: Oxford.

Sen, A.K. (2001), “The Many Faces of Gender Inequality”, New Republic 27: 35–39.

Shorrocks, A.F. (1980), “A Class of Additively Decomposable Measures”, Econometrica, 50: 613–625.

Theil, H. (1967), Economics and Information Theory, Amsterdam: North-Holland.