Why did wage inequality increase? Evidence from urban India 1983–99

Kijima, Yoko

doi:10.1016/j.jdeveco.2005.04.008

“…Evidence from other countries suggests an elasticity of substitution between tertiary and secondary graduates between 1.1 and 2.5. 18 Thus, the estimated elasticity between 2 to 2.2 is consistent with other countries'experiences, especially from developing counties like Brazil and Columbia. Also, similar estimates are obtained for (1= A ) in both stages as predicted by the theoretical model.…”

Section: Resultssupporting

confidence: 83%

“…The attention to urban area only is consistent with some other studies (e.g. Kijima (2006), Kumar and Mishra (2005), Bhaumik and Chakravaty (2007)). 12 It takes a minimum of 21 years of age to complete tertiary education.…”

Section: Descriptionsupporting

confidence: 92%

“…Chamarbagwala (2006 divides the total labor force into 100 labor groups (two sex groups, …ve education groups and ten experience groups) following Katz and Murphy (1992) and …nds that changes in relative wages during 1983-1999 is driven mostly by increase in demand. Kijima (2006) explores the wage inequality in urban India during 1983-1999 using the Juhn et al (1993) methodology and …nds that wage inequality in India started increasing before 1991 and the increase is attributable to an increase in the returns to tertiary education.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

India's Increasing Skill Premium: Role of Demand and Supply

Azam

¹

2010

The B.E. Journal of Economic Analysis &Amp; Policy

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in India's Increasing Skill Premium: Role of Demand and Supply Mehtabul Azam D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. The tertiary-secondary (college-high school) wage premium has been increasing in India over the past decade, but the increase differs across age groups. The increase in wage premium has been driven mostly by younger age groups, while older age groups have not experienced any significant increase. This paper uses the demand and supply model with imperfect substitution across age groups developed in Card and Lemieux (2001) to explain the uneven increase in the wage premium across age groups in India. The findings of this paper are that the increase in the wage premium has come mostly from demand shifts in favor of workers with a tertiary education. More importantly, the demand shifts occurred in both the 1980s and 1990s. Relative supply has played an important role not only determining the extent of increase in wage premium, but also its timing. The increase in relative supply of tertiary workers during 1983-1993 offset the demand shift, limiting the wage premium increase. But during 1993-1999, the growth rate of the relative supply of tertiary workers decelerated, while relative supply was virtually stagnant during 1999-2004. Both of these periods saw an increase in the wage premium as the countervailing supply shift was weak.JEL Classification: J20, J23, J31

show abstract

“…In the Indian context, several studies have documented a rise in wage inequality over the period of market-oriented reforms. Using data on full-time urban male workers, Kijima (2006) finds that wage inequality (as measured by wage differentials between the 90 th and 10 th percentiles of the wage distribution) began increasing in the 1980s, and also documents an increase in the returns to skills (proxied by education). She speculates that the liberalization of trade policies and industrial deregulation in the early 1990s may have had something to do with this.…”

Section: Market-oriented Reforms and Inequality: A Brief Reviewmentioning

confidence: 99%

“…For example, based on nationally representative household expenditure data collected by India's National Sample Survey Organisation (NSSO), the Gini coefficient was fairly stable at around 32% between 1983 and 1993 but increased to around 36% in 2004 (Cain et al 2010). Evidence of rising inequality over the 1990s also comes from other sources, including data on wages from the NSSO's employmentunemployment surveys (Kijima 2006); corporate incomes; starting salaries of graduates of India's top universities; and even Forbes magazine's annual list of the world's billionaires (see Walton 2010 for a detailed discussion on growing inequality in India).…”

Section: Introductionmentioning

confidence: 99%

The effects of trade and services liberalization on wage inequality in India

Mehta

¹

,

Hasan²

2012

International Review of Economics & Finance

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views expressed in this paper are those of the author(s) and do not necessarily reflect the views or policies of the Asian Development Bank. Terms of use: Documents inThe ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

show abstract

Returns to education in India: Capturing the heterogeneity

Mitra

¹

2019

Asia & Pacific Policy Stud

View full text Add to dashboard Cite

The aim of this article is to estimate the marginal rates of return to various levels of education in India, across the entire wage distribution. For this purpose, unit level data from the 68th round of the National Sample Survey Organisation (India) for the year 2011-2012 have been used, and the technique of quantile regression has been applied. Average estimates were ignored, and the heterogeneity in rates of return was captured across the following disaggregations: (a) all India, public and private sectors, (b) gender, and caste groups (scheduled tribes [STs], scheduled castes [SCs], other backward classes, and others). The findings showcase that the rates of return increased with consecutive higher levels of education. However, this impact varies across the disaggregations examined. The returns are the least for STs and SCs as compared with others (the unreserved category), with the differences in the rates of return being maximum in the private sector. Additionally, women experience a higher rate of return than men. These findings have important policy implications with respect to strengthening the public funding of higher education and encouraging participation from the marginalised segments (STs, SCs), which is otherwise dismal. ---This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

show abstract

Why did wage inequality increase? Evidence from urban India 1983–99

Cited by 150 publications

References 35 publications

India's Increasing Skill Premium: Role of Demand and Supply

India's Increasing Skill Premium: Role of Demand and Supply

The effects of trade and services liberalization on wage inequality in India

Returns to education in India: Capturing the heterogeneity

Contact Info

Product

Resources

About