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Decomposition analysis of earnings inequality in rural India: 2004–2012

Khanna, Shantanu; Goel, Deepti; Morissette, René (2016), Decomposition analysis of earnings inequality in rural India: 2004–2012, IZA Journal of Labor & Development, 5, 18. 10.1186/s40175-016-0064-8

Type
Article accepté pour publication ou publié
Date
2016
Journal name
IZA Journal of Labor & Development
Volume
5
Number
18
Publisher
Springer
Publication identifier
10.1186/s40175-016-0064-8
Metadata
Show full item record
Author(s)
Khanna, Shantanu
University of California
Goel, Deepti
Institute for the study of labor [IZA]
Morissette, René
Statistics Canada
Abstract (EN)
We analyze the changes in earnings of paid workers (wage earners) in rural India from 2004/05 to 2011/12. Real earnings increased at all percentiles, and the percentage increase was larger at the lower end. Consequently, earnings inequality declined. Recentered influence function decompositions show that throughout the earnings distribution, except at the very top, both changes in “worker characteristics” and in “returns to these characteristics” increased earnings, with the latter having played a bigger role. Decompositions of inequality measures reveal that although the change in characteristics had an inequality-increasing effect, chiefly attributable to increased education levels, inequality declined because workers at lower quantiles experienced greater improvements in returns to their characteristics than those at the top.
Subjects / Keywords
Earnings; Inequality; Earning distribution; Rural India
JEL
J30 - General
J31 - Wage Level and Structure; Wage Differentials
O53 - Asia including Middle East

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