Changing Wage Structure in India in the Post-Reform Era: 1993-2011

30 Pages Posted: 20 Apr 2016

See all articles by Hanan G. Jacoby

Hanan G. Jacoby

World Bank - Agriculture and Rural Development Department; World Bank - Development Research Group (DECRG)

Basab Dasgupta

World Bank

Date Written: September 28, 2015

Abstract

This paper documents the changing structure of wages in India over the post-reform era, the roughly two-decade period since 1993. To investigate the factors underlying these changes, a supply-demand framework is applied at the level of the Indian state. While real wages have risen across India over the past two decades, the increase has been greater in rural areas and, especially, for unskilled workers. The analysis finds that, in rural areas, the changing wage structure has been driven largely by relative supply factors, such as increased overall education levels and falling female labor force participation. Relative wage changes between rural and urban areas have been driven largely by shifts in employment, notably into unskilled-intensive sectors like construction.

Keywords: Labor Markets, Economic Theory & Research, Labor Policies, Rural Poverty Reduction, Markets and Market Access

Suggested Citation

Jacoby, Hanan G. and Dasgupta, Basab, Changing Wage Structure in India in the Post-Reform Era: 1993-2011 (September 28, 2015). World Bank Policy Research Working Paper No. 7426, Available at SSRN: https://ssrn.com/abstract=2666811

Hanan G. Jacoby (Contact Author)

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/hjacoby

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Basab Dasgupta

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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