Does move to market have an impact on earnings gap across gender? Some evidence from India

Abstract

We use Indian National Sample Survey employment–unemployment data for the urban sector for the years 1987 and 1999. Our results indicate that the gender wage gap had narrowed considerably between these two years, for all earnings deciles and for all education cohorts. The narrowing of the earnings gap can be attributed largely to a sharp increase in the returns to the labour market experience of women.

Acknowledgements

The authors thank Ralitza Dimova and seminar participants at Keele University for helpful comments. They remain responsible for all remaining errors.

Notes

¹The rationale for ignoring the informal sector employees can be found in Bhaumik and Chakrabarty (2006).

²The data do not report years of schooling, and hence, it is not possible to estimate an individual's years of labor market experience. Since stylized measures of experience are a linear monotonic transformation of age – e.g. age less years of schooling and 5 years – we use age in the regression specification, rather than erroneous values of experience.

³The OLS models had R ² values in the 0.48–0.58 range and the associated F- and t-statistics also suggested that the specification fit the data for each sub-sample quite well.

Table 2. Determinants of earnings

⁴Details regarding the algorithm can be found in Bhaumik and Chakrabarty (2006).