Worlds Apart in India: Analysis of Contractualization of Labor and Evidence from Labor Market Discrimination

Abstract

This study attempts to decipher the working condition of contract workers with subsequent inferences from wage-based discrimination in formal mining units to understand discriminatory practices and informalization of employment. The methodology uses both theoretical and empirical methods. The empirical analysis follows a descriptive approach with wage decomposition analysis to understand the ongoing phenomenon. The study is primarily based on field data, but we have also solicited secondary data from ASI, NSSO, etc. The field survey tries to find the extent of wage discrimination based on the responses from 300 respondents of state copper mining units located in Madhya Pradesh and Rajasthan. The findings suggest that the socioeconomic conditions do play a massive role in discriminatory behavior in the workplace. The analysis indicates economic discrimination or inequity is high among various social groups (caste) with reference to education, work experience, and skill levels. We found that there is extensive use of contractual labor in public sector units. And informalization of labor causes massive devaluation in working conditions, as wage-based discrimination is found to be stark for contractual workers further aggravating the situation.

Keywords:

• workers
• labor
• contractualization
• discrimination
• wage
• informal
• India

JEL Classification:

• J31
• J38
• J71

Data availability statement

Most of the refined data are already made available in the form of tables and rows which can be made available on request.

Notes

1 The Other Backward Classes, lower castes, were classified originally in the shudra varna in the caste system. They are considered to be dominant community in terms of numbers but socio-economically backward.

2 Historically as community Scheduled Castes are considered in the bottom of pyramid of Indian caste system. They are subject to the untouchability and several other social and economic restrictions.

3 Scheduled Tribes in India are considered to be original inhabitants of the land with primitive and distinctive culture, geographical isolation, and backwardness. Most of them also termed as Adivasis.

4 SBCs are economically deprived community within the OBC group. This group is created to provide focused benefit of reservation and other benefits.

5 Table nos 3 to 20 are kept at the end of paper to avoid congestion and improve readability.

Additional information

Notes on contributors

Sazzad Parwez

Sazzad Parwez teaches at School of Development Studies, Indian Institute of Health Management Research University, Jaipur, India. He is PhD in Economics with scholarship in the area of Development Economics, Labour Economics and Informal Economy.

Kapil Meena

Kapil Meena teaches at Department of Economics, Ramjas College, University of Delhi, India. He is PhD in Economics with scholarship in the area of Labour Economics.