Wage differentials between the public and private sectors in India

✍ Scribed by Elena Glinskaya; Michael Lokshin

• Publisher: John Wiley and Sons
• Year: 2007
• Tongue: English
• Weight: 272 KB
• Volume: 19
• Category: Article
• ISSN: 0954-1748
• DOI: 10.1002/jid.1326

✦ Synopsis

Abstract

This study uses 1993–94 and 1999–2000 rounds of India Employment and Unemployment survey to investigate wage differentials between the public and private sectors. To obtain robust estimates of the wage differential, we apply three econometric techniques each relying on a different set of assumptions about the process of job selection and wage formation. All three methods show that differences in wages between public sector workers and workers in the formal‐private and informal‐casual sectors are positive and high. On average, the public sector premium ranges between 62 and 102 per cent over the private‐formal sector, and between 164 and 259 per cent over the informal‐casual sector, depending on the choice of methodology. The wage differentials in India tend to be higher in rural as compared to urban areas, and are higher among women than among men. The wage differential also tends to be higher for low‐skilled workers. There is considerable evidence of an increase in the wage differential between 1993–1994 and 1999–2000. Copyright © 2007 John Wiley & Sons, Ltd.