Abstract:

The phenomena of rising wage/income inequality in some major developing economies over the period of their economic liberalisations since late 1980s has led us to examine this in detail for the case of Indian manufacturing sector covering last two decades of India’s economic liberalisation since early 1990s. It examines wage inequalities using five different measures such as skilled-unskilled wage ratio, ratio of 90 percentile to median wage, ratio of median to 10 percentile wage, ratio of 90 percentile to 10 percentile wage, and Gini coefficient. Two different data sets have been used to cover both organised and unorganised segments of Indian manufacturing sector. The results of this study show that the wage inequality measured by the skilled-unskilled wage ratio for organised manufacturing increased nearly by two folds. Other four wage inequality measures covering the total manufacturing, show that ratio of 90 percentile to median wage and Gini coefficient increased over the period 1993-2009; whereas, ratio of median to 10 percentile wage declined, and ratio of 90 percentile to 10 percentile wage remained almost unchanged over the same period. This study also observed inter-industry and intraindustry heterogeneities in wage inequality across various technology intensive groups within the Indian manufacturing sector.