Public and Private Sector Jobs, Unreported Income and Consumption Gap in India: Evidence from Micro-Data

33 Pages Posted: 17 Mar 2012

See all articles by Saibal Kar

Saibal Kar

Centre for Studies in Social Sciences, Calcutta; Institute of Labor Economics (IZA)

Poulomi Roy

Jadavpur university

Sarani Saha

Indian Institute of Technology

Abstract

This paper tries to document the presence of unreported income among public sector employees in India. We investigate empirically the wage gap as well as consumption expenditure parity between public and private sector workers. It tests the hypothesis that despite a lower level of public sector income in some of the quantiles, if the level of durable goods consumption between the private and the public sector employees are similar, then it might be indicative of the presence of unreported income among the public sector workers. The 2004-05 survey of income and consumption by workers in both private and public sectors (NSSO) supports presence of unaccounted for income among public sector employees at the uppermost quantile. The empirical part is followed by a generalized theoretical formulation that comes up with a measure of the equilibrium level of the unreported income earned by the public sector employees.

Keywords: unreported income, consumption, indirect utility, quantile regression, India

JEL Classification: C12, C31, D23, J21

Suggested Citation

Kar, Saibal and Roy, Poulomi and Saha, Sarani, Public and Private Sector Jobs, Unreported Income and Consumption Gap in India: Evidence from Micro-Data. IZA Discussion Paper No. 6404. Available at SSRN: https://ssrn.com/abstract=2025320

Saibal Kar (Contact Author)

Centre for Studies in Social Sciences, Calcutta ( email )

R-1, Baishnabghata Patuli Township
Calcutta, 700 094
India
91-33-2462 7252 (Phone)
91-33-2462 6183 (Fax)

HOME PAGE: http://www.cssscal.org

Institute of Labor Economics (IZA) ( email )

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

Poulomi Roy

Jadavpur university ( email )

kolkata, West Bengal 700032
India

Sarani Saha

Indian Institute of Technology ( email )

BF-1/12, Indian Institute of Technology, Kharagpur
Kharagpur, West Bengal 721302
India

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