Extending the Coverage of Minimum Wages in India: Simulations from Household Data

Economic & Political Weekly, Forthcoming

21 Pages Posted: 11 May 2011

See all articles by Patrick Belser

Patrick Belser

International Labour Organization (ILO)

Uma Rani

International Labour Organization (ILO)

Date Written: May 11, 2011

Abstract

In India, there is a debate about the possible extension of minimum wages to all wage-earners. Our paper provides some benchmark figures on the effects of either making the national minimum wage floor compulsory or extending the coverage of state-level minimum wages. Using the 2004-05 Employment-Unemployment Survey along with the Consumer Expenditure Survey, we estimate that the extension of minimum wages at existing levels could improve the earnings of 73 to 76 million low-paid salaried and casual workers. We also show that an extended minimum wage could substantially reduce inequality, poverty and the gender pay gap, even in the presence of some disemployment effects.

Keywords: minimum wages, India, low pay, casual workers, inequality, poverty, gender pay gap

JEL Classification: J31, J21, J23, J38

Suggested Citation

Belser, Patrick and Rani, Uma, Extending the Coverage of Minimum Wages in India: Simulations from Household Data (May 11, 2011). Economic & Political Weekly, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1838088

Patrick Belser (Contact Author)

International Labour Organization (ILO) ( email )

Route des Morillons 4
Geneva
Switzerland

Uma Rani

International Labour Organization (ILO) ( email )

Route des Morillons 4
Geneva
Switzerland

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