ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Pay Inequality in Manufacturing, 1979-98

This paper presents the trend of changes in pay inequality in manufacturing by regions and sectors for 1979-98. The decomposability property of Theil index makes it possible to show that manufacturing pay inequality in India has risen both across sectors and across regions, though more strongly across sectors. The paper also shows that the rise in inequality accelerates in the period following the introduction of reforms, after controlling for changes in the level of real per capita income. It appears that a large part of rising manufacturing pay inequality in the post-reform period can be attributed to rising relative pay in the electricity sector.

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