Public and Private Sector Jobs, Unreported Income and Consumption Gap in India: Evidence from Micro-Data

Saibal Kar (), Poulomi Roy () and Sarani Saha

No 6404, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper tries to document the presence of unreported income among public sector employees in India. We investigate empirically the wage gap as well as consumption expenditure parity between public and private sector workers. It tests the hypothesis that despite a lower level of public sector income in some of the quantiles, if the level of durable goods consumption between the private and the public sector employees are similar, then it might be indicative of the presence of unreported income among the public sector workers. The 2004-05 survey of income and consumption by workers in both private and public sectors (NSSO) supports presence of unaccounted for income among public sector employees at the uppermost quantile. The empirical part is followed by a generalized theoretical formulation that comes up with a measure of the equilibrium level of the unreported income earned by the public sector employees.

Keywords: quantile regression; unreported income; consumption; indirect utility; India (search for similar items in EconPapers)
JEL-codes: C12 C31 D23 J21 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-03
New Economics Papers: this item is included in nep-iue
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Published - published in: North American Journal of Economics and Finance, 2014, 29, 285-300

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Journal Article: Public and private sector jobs, unreported income and consumption gap in India: Evidence from micro-data (2014)
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