Wage structure and wage differentials in formal and informal sectors in India

Smrutirekha Singhari () and S. Madheswaran ()
Additional contact information
Smrutirekha Singhari: Institute for Social and Economic Change
S. Madheswaran: Institute for Social and Economic Change

The Indian Journal of Labour Economics, 2017, vol. 60, issue 3, No 6, 389-414

Abstract: Abstract This paper attempts to decipher wage structure and wage differentials by gender, caste and religious groups in formal and informal sectors in India using recent 2004–05 and 2011–12 NSSO’s survey data. The study finds that the wage structure in formal and informal sectors differs a lot. The wage rates paid to workers in the informal sector are lower than that of the formal sector. The variations in wages among workers in informal sector and for casual workers in particular are negligible. The gender wage differentials are found to be more in the informal sector than in the formal sector, while caste-based wage differentials are found to be high both in formal and informal sectors of the regular labour market; it is more pronounced in the private sector of the regular formal labour market. Moreover, wage differentials between Hindus and Muslims are high in both formal and informal sectors of the regular labour market; the religion-based wage differential is observed at higher education levels. In addition to this, the average daily wages paid to women and STs in informal sector are found to be lower than the National Floor Level Minimum Wage rate. Thus, there is a need for proper implementation of minimum wage policy in India.

Keywords: Wage structure; Wage differentials; Formal sector; Informal Sector; India (search for similar items in EconPapers)
JEL-codes: C10 J31 J38 J42 J46 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s41027-018-0110-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:ijlaec:v:60:y:2017:i:3:d:10.1007_s41027-018-0110-y

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41027

DOI: 10.1007/s41027-018-0110-y

Access Statistics for this article

The Indian Journal of Labour Economics is currently edited by Alakh Sharma

More articles in The Indian Journal of Labour Economics from Springer, The Indian Society of Labour Economics (ISLE) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().