Income Inequality in Rural India: Decomposing the Gini by Income Sources

13 Pages Posted: 13 Jul 2009

See all articles by Abusaleh Shariff

Abusaleh Shariff

CGIAR - Development Strategy and Governance Division

Mehtabul Azam

Oklahoma State University - Stillwater; IZA Institute of Labor Economics

Date Written: April 15, 2009

Abstract

This paper examines income inequality in rural India in 1993 and 2005. It attempts to ascertain the contribution of different income sources to overall income inequality, and change in their relative importance between 1993 and 2005 through a decomposition of Gini coefficient. The paper finds that income inequality has increased between 1993 and 2005. Agriculture income continues to contribute majorly in total income and income inequality; however its share in total income and total income inequality has declined significantly. A marginal increase in agriculture and salaried income leads to increase in inequality; however, a marginal increase in labor income (both agriculture and non-agriculture) lead to reduction in the income inequality.

Keywords: Gini decomposition, income inequality, income sources, India

JEL Classification: D31, D63, I30

Suggested Citation

Shariff, Abusaleh and Azam, Mehtabul, Income Inequality in Rural India: Decomposing the Gini by Income Sources (April 15, 2009). Available at SSRN: https://ssrn.com/abstract=1433105 or http://dx.doi.org/10.2139/ssrn.1433105

Abusaleh Shariff

CGIAR - Development Strategy and Governance Division ( email )

2033 K Street, NW
Washington, DC 20006
United States

Mehtabul Azam (Contact Author)

Oklahoma State University - Stillwater ( email )

Stillwater, OK 74078-0555
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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