Earning Differentials Across Social Groups: Evidences from India

Majumder, Rajarshi (2007): Earning Differentials Across Social Groups: Evidences from India. Published in: Indian Journal of Labour Economics , Vol. 50, No. 4 (December 2007)

Abstract

Earning differentials in labour market leads to multidimensional aspects of deprivation and disadvantage. While the ‘deprived’ are excluded from participation in society, such exclusion may also cause deprivation. In economic terms, disparity in labour markets has far-reaching consequences because of its impact on earnings and asset creation. In this paper we look at earnings differentials across social groups in the Indian Wage Labour Market. The results indicate that the share of the Excluded Groups - SCs, STs, and OBCs - in Wage Employment is lower than their corresponding share in population and their shares in Wage Earnings are even lower. Earning ratios has been continuously declining, most sharply in the 2000-05 period. The share of these Excluded Groups in the Top Wage classes is also negligible, with most of them concentrated in the Bottom Wage class. Upward mobility from lower to higher wage classes is low for these groups compared to others, thereby increasing the disparity between the groups. Skewed Occupational Distribution and predominance of Casual workers among the excluded groups are major reasons for such disparity. Earning differential is pronounced both in the economically lagging and advanced states and a rise in disparities in the post-reform period indicates that high growth-high private investment-tertiary sector boom is creating new divide in the society in terms of deprivation and discrimination. As discrimination leads to disparities in capability formation and ownership of assets, the excluded groups are unable to participate in the growing economic affluence and are being increasingly marginalized. Inclusive growth strategies and participatory development programmes with substantial local-global synergy is the need of the hour to combat earning differentials in labour market.

• Item Type: MPRA Paper
• Language: English
• Keywords: Earning Disparity; Wage Labour Market; Social Exclusion; India
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure

References

Appasamy, P., S. Guhan, R. Hema, M. Majumdar and A. Vaidyanathan (1996) – “Social exclusion from a welfare rights perspective in India”, IILS Research Series, No.106, Geneva, Switzerland

Atkinson, A.B. (1998) - “Social Exclusion, Poverty and Unemployment”’ in A.B. Atkinson and J. Hills (editors) Exclusion, Employment and Opportunity, CASE paper 4, Centre for Analysis of Social Exclusion, London School of Economics, London

Banerjee, B. and J.B. Knight (1985) - Caste Discrimination in the Indian Labor Market.” Journal of Development Economics, Vol. 17

Beall, J. & C. Clert (2000) - Globalization and Social Exclusion: Implications for Urban Social Policy, Paper prepared for “African Families II: Macroeconomics”. World Bank

Beall, J. (2002) – “Globalisation and Social Exclusion in Cities: Framing the Debate with Lessons from Africa and Asia”, Working Paper No. 02-27, DESTIN, London School of Economics

Bhalla, A.S. & F. Lapeyre (1999) - “Global Integration and Social Exclusion with Special Reference to Poland and Hungary”, European Journal of Development Research, Vol. 11, No. 1

Borooah, Vani K., A. Dubey, and S. Iyer (2005) - “Has Job Reservation Been Effective? Caste, Religion, and Economic Status in India.” Unpublished manuscript, Northern Ireland: University of Ulster, November 2005, (cited from Takahiro, 2007)

Carr, M. & M. Chen (2004) – “Globalization, Social Exclusion and Work: with Special Reference to Informal Employment and Gender”, Working Paper No. 20, Policy Integration Department, World Commission on the Social Dimension of Globalization, International Labour Office, Geneva, May 2004

Clert, C. (2000) - Policy Implications of a Social Exclusion Perspective In Chile: Priorities, Discourse And Methods In Question. PhD Thesis. Social Policy Department, London School of Economics and Political Science, London (cited from Beall, 2002)

de Haan, A. (1999) - “Social Exclusion: an Alternative Concept for the Study of Deprivation?” IDS Bulletin, Vol. 29, No. 1

de Haan, A. and S. Maxwell, (1998) - “Poverty and Social Exclusion in North and South”, IDS Bulletin, Vol. 29, No. 1

de Haan, A. (1995) – “Bibliographical Review on Social Exclusion in South Asia: Annotated IILS / ILO, www.ilo.org/public/english/bureau/inst/papers/1994/dp77/index.htm

Dunlop John E., & V.A. Velkoff (1999) - “Women and the Economy in India”, U.S. Census Bureau, Official Statistics

Duraisamy, M. & P. Duraisamy (1996) - “Sex Discrimination in Indian Labour Markets”, Feminist Economics, 2 (2), pp. 41-61.

Esteve-Volart, B. (2004) – “Gender Discrimination and Growth: Theory and Evidence from India”, DEDPS 42, Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science.

Gore, C. and J. Figueiredo, (1997) – (ed) Social Exclusion and Anti-Poverty Policy: A Debate, IILS Research Series 110, International Labour Organisation, Geneva

Gore, C. (1994) – “Social Exclusion and Africa South of the Sahara: A Review of the Literature”, IILS / ILO, www.ilo.org/public/english/bureau/inst/papers/1994/dp62/index.htm

ILO, (1996) – “Social Exclusion and Anti-Poverty Strategies: A Synthesis of Findings”, Geneva

Joint-Lambert, M. (1995) - “Exclusion: Pour une Plus Grane Rigueur d’Analyse”, Droit Social, No. 3 (cited from Beall, 2002)

Kabeer, N. (2000) – “The power to choose: Bangladeshi Women and Labour Market Decisions in London and Dhaka”, London, Verso

Kaijage, F. and A. Tibaijuka, (1996) – “Poverty and Social Exclusion in Tanzania”, IILS Research Series, No.109, Geneva, Switzerland

Kumar, Arun, S. Prushothaman, S. Purohit, Padma, and A. Kumar, (1999) - “Women Workers: Inequalities at Work - Report of the Survey of Women Workers’, Working Conditions in Industry”, Best Practices Foundation, Bangalore, India

Lovering, J. (1998) - “Globalization, Unemployment and ‘Social Exclusion’ in Europe: Three perspectives on the current policy debate”, in International Planning Studies. 3(1): 35-56

Madheswaran,S. & T.Lakshmanasamy (1996) - “Occupational Segregation and Earnings Differentials by Sex: Evidence from India”, Artha Vijnana, 38 (4), pp. 372-86.

Mathur, A. (1999) - “Economic Reforms, Employment and ‘Non-Employment’: Theory, Evidence and Policy”, Keynote paper for Technical Session VI of 82nd Annual Conference of the Indian Economic Association, December, 1999.

Mishra, R. (1999) - “Beyond the Nation State: Social Policy in an Age of Globalization” in C. Jones-Finer (editor) Transnational Social Policy, Blackwell, Oxford

Mukherjee, D. (2003) - “The Changing World of Work and No-Work”, Indian Journal of Labour Economics, Vol. 46, No. 4, 2003.

Mutatkar, R. (2005) – “Social Group Disparities and Poverty in India”, Working Paper no. WP-2005-004, Indira Gandhi Institute of Development Research

Nayak, P. (1995) - “Economic Development and Social Exclusion in India”, in Social exclusion and South Asia. Geneva, ILO.

Sharma, A. & T.S. Papola (1999) - “Gender and Employment in India”, Indian Society of Labour Economics and Institute of Economic Growth, New Delhi

Sundaram, K. & S.D. Tendulkar (2003) – “Poverty Among Social and Economic Groups In India in the Nineteen Nineties”, Working Paper No. 118,

Takahiro, Ito (2007) – “Caste Discrimination and Transaction Costs in the Labor Market: Evidence from Rural North India”, Discussion Paper Series No. 200, Institute of Economic Research, Hitotsubashi University

Willis, M. (2000) - Meddling with the Media, Democratic Left Discussion Zone, from the website http://www.democratic-left.org.uk/discuss/mwillis.html

World Bank (2000) - World Development Report 2000-2001: Attacking Poverty, World Bank