Author: S Chandrasekhar, Karthikeya Naraparaju, Ajay Sharma
Title: Spatial Disparities in Household Earnings in India: Role of Urbanization, Sectoral Inequalities, and Rural-Urban Differences
Abstract: This paper focuses on spatial disparities in household earnings in rural and urban India. A point of departure from the existing literature on inequality in India is that we focus on household earnings rather than consumption expenditure. We analyse data from the nationally representative Periodic Labour Force Survey 2018-19. We provide a rich description of distribution of rural and urban monthly per capita household earning at the national and sub-national level and estimates of earnings inequality. While there are a multitude of factors that affect the evolution of income inequality, we focus on the salience of urbanization in explaining differences in inequality at the sub-national level vis a vis India. The results of the decomposition exercise help identify the proximate factors behind inequality differentials across various states. We situate our findings within the Kuznets framework and the stylized facts in the extant literature.
Keywords: Households Earnings, Inequality, Urbanization, India, Decomposition
JEL Code: D31, D63, R1