Is there a Glass Ceiling or Sticky Floor in India? Examining the Wage Gap across the Wage Distribution

Smrutirekha Singhari and S.Madheswaran

No 8345, EcoMod2015 from EcoMod

Abstract: The motivation of the study is to answer the following questions: Is there any significant wage gap across gender, caste and religious groups in regular and casual labour market in India? Does ‘Glass Ceiling’ or ‘Sticky Floor’ exist in labour market? Why such phenomenon occurs? The Blinder-Oaxaca decomposition method and Machado Mata Melly decomposition method The findings show a declining trend of gender wage gap from 2004-05 to 2011-12. The decline in endowment difference has largely contributed to decline in raw wage differentials. The gender discrimination is widening over the years, because the percentage contribution of coefficients to the raw wage difference is showing an increasing trend. We observe evidence of ‘sticky floor’ in both regular and casual labour market in India. The evidence of sticky floor implies that women at the lower end of the overall wage distribution experience larger wage gaps compared to women at the upper end. The wage gap between Scheduled Caste and Non Scheduled Caste casual workers is increasing throughout the wage distribution and it is more at the upper tail. The workers from lower caste groups experience ‘glass ceiling’ in casual labour market. It is due to occupational segregation in labour market. The Scheduled Caste workers are still confined to traditional caste occupations or occupations with low returns. The policy should be in favor of breaking this hierarchy of occupation in labour market. As far as caste based discrimination is concerned, we found that the percentage contribution of characteristics (endowment) to raw wage difference has increased over the years, except in casual worker’s lower wage distribution. It is important to note that the large endowment difference implies prevalence of pre-market discriminatory practices in India. The average earnings of Muslims are comparatively lower than that of NonMuslims in regular labour market. Out of total raw wage gap between Muslim and NonMuslim wage gap in regular labour market, almost 70 percent is on account of endowment difference. There is a need for continued government policies aimed at education and skill building for the Scheduled Castes and Muslim people.

Keywords: India; Labor market issues; Developing countries (search for similar items in EconPapers)
Date: 2015-07-01
New Economics Papers: this item is included in nep-gen
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