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The Impact of the Minimum Wage on Male and Female Employment and Earnings in India

Author

Listed:
  • Nidhiya Menon

    (Department of Economics and International Business School, Brandeis University)

  • Yana van der Meulen Rodgers

    (Women's and Gender Studies Department, Rutgers University)

Abstract

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

Suggested Citation

  • Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    • Handle: RePEc:tpr:adbadr:v:34:y:2017:i:1:p:28-64
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    Citations

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    Cited by:

    1. Soundararajan, Vidhya, 2019. "Heterogeneous effects of imperfectly enforced minimum wages in low-wage labor markets," Journal of Development Economics, Elsevier, vol. 140(C), pages 355-374.
    2. Kashif Mansoor & Donal O'Neill, 2020. "Minimum Wage Compliance and Household Welfare: An analysis of over 1500 Minimum Wages," Economics Department Working Paper Series n301-20.pdf, Department of Economics, National University of Ireland - Maynooth.
    3. Neumark, David & Munguía Corella, Luis Felipe, 2021. "Do minimum wages reduce employment in developing countries? A survey and exploration of conflicting evidence," World Development, Elsevier, vol. 137(C).
    4. Doddy Ismunandar Bahari & Hermanto Siregar & Sahara Sahara & Handewi Purwati Saliem Rachman, 2019. "Impact of Agricultural Sectors and Income Inequality in Rural Toward Role of Public Education in Decreasing Educational Inequality in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 151-159.
    5. Menon, Nidhiya & Rodgers, Yana van der Meulen, 2018. "Child labor and the minimum wage: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 480-494.
    6. Mansoor, Kashif & O'Neill, Donal, 2021. "Minimum wage compliance and household welfare: An analysis of over 1500 minimum wages in India," World Development, Elsevier, vol. 147(C).
    7. Mohit Sharma & Brinda Viswanathan, 2022. "Minimum Wages in the Presence of Wage and Non-Wage Sectors in India: An Exploratory Analysis of the Non-Farm Sector," Working Papers 2022-225, Madras School of Economics,Chennai,India.
    8. Cristian Valeriu Paun & Radu Nechita & Alexandru Patruti & Mihai Vladimir Topan, 2021. "The Impact of the Minimum Wage on Employment: An EU Panel Data Analysis," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    9. Jennifer Kunz & Laura Michele Ludwig, 2022. "Curbing Discriminating Human Resource Practices—A Microfounded Perspective," Schmalenbach Journal of Business Research, Springer, vol. 74(3), pages 307-344, September.
    10. Gudibande, Rohan Ravindra & Jacob, Arun, 2020. "Minimum wages for domestic workers: impact evaluation of the Indian experience," World Development, Elsevier, vol. 130(C).
    11. Feiyang Shi, 2022. "Import Shock and Local Labour Market Outcomes: A Sino-Indian Case Study," IHEID Working Papers 04-2022, Economics Section, The Graduate Institute of International Studies.
    12. Abdullah Selim Öztek, 2021. "Minimum Wage Effects under Informality: Evidence from Turkey," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 35(2), pages 98-136.

    More about this item

    Keywords

    employment; gender; India; minimum wage; wages;
    All these keywords.

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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