IDEAS home Printed from https://ideas.repec.org/p/gro/rugggd/gd-114.html
   My bibliography  Save this paper

Education and household inequality change: a decomposition analysis for India

Author

Listed:
  • Pieters, Janneke

    (Groningen University)

Abstract

Previous studies show that rising returns to education have lead to higher wage inequality in developing countries. However, given the importance of non-wage employment and indirect effects of education through labour supply and fertility choices, a similar relationship does not necessarily hold for inequality between households. Based on a decomposition analysis for India, we find counteracting impacts of education on household expenditure inequality. Declining returns to education of household heads reduced inequality, driven by the self-employed. In contrast, rising returns to spouses? education increased inequality in urban areas. We also find that changes in education levels increased rural and urban inequality, due to persistently high illiteracy. Finally, the indirect effect on fertility had a small equalizing impact in urban areas, but slightly increased inequality in rural areas.

Suggested Citation

  • Pieters, Janneke, 2010. "Education and household inequality change: a decomposition analysis for India," GGDC Research Memorandum GD-114, Groningen Growth and Development Centre, University of Groningen.
    • Handle: RePEc:gro:rugggd:gd-114
    as

    Download full text from publisher

    File URL: http://irs.ub.rug.nl/ppn/325608415
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chamarbagwala, Rubiana, 2006. "Economic Liberalization and Wage Inequality in India," World Development, Elsevier, vol. 34(12), pages 1997-2015, December.
    2. José De Gregorio & Jong–Wha Lee, 2002. "Education and Income Inequality: New Evidence From Cross‐Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
    3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    4. François Bourguignon & Francisco Ferreira & Phillippe Leite, 2008. "Beyond Oaxaca–Blinder: Accounting for differences in household income distributions," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(2), pages 117-148, June.
    5. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    6. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    7. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    8. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    9. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    10. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    11. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    12. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics.
    13. Peter Gottschalk & Sheldon Danziger, 2005. "Inequality Of Wage Rates, Earnings And Family Income In The United States, 1975–2002," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 231-254, June.
    14. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2005. "Entrepreneurship Selection and Performance: A Meta-Analysis of the Impact of Education in Developing Economies," The World Bank Economic Review, World Bank, vol. 19(2), pages 225-261.
    15. Shatakshee Dhongde, 2007. "Measuring the Impact of Growth and Income Distribution on Poverty in India," Journal of Income Distribution, Ad libros publications inc., vol. 16(2), pages 25-48, June.
    16. Kijima, Yoko, 2006. "Why did wage inequality increase? Evidence from urban India 1983-99," Journal of Development Economics, Elsevier, vol. 81(1), pages 97-117, October.
    17. Angus Deaton, 2003. "Prices and Poverty in India, 1987-2000," Working Papers 199, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    18. Jean Drèze & Mamta Murthi, 2001. "Fertility, Education, and Development: Evidence from India," Population and Development Review, The Population Council, Inc., vol. 27(1), pages 33-63, March.
    19. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    20. Zhu, Susan Chun & Trefler, Daniel, 2005. "Trade and inequality in developing countries: a general equilibrium analysis," Journal of International Economics, Elsevier, vol. 65(1), pages 21-48, January.
    21. Francesco Devicienti, 2010. "Shapley-value decompositions of changes in wage distributions: a note," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 35-45, March.
    22. Puja Vasudeva Dutta, 2006. "Returns to Education: New Evidence for India, 1983-1999," Education Economics, Taylor & Francis Journals, vol. 14(4), pages 431-451.
    23. Ram, Rati, 1989. "Can educational expansion reduce income inequality in less-developed countries?," Economics of Education Review, Elsevier, vol. 8(2), pages 185-195, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Reza Najarzadeh & Alireza Keikha & Hassan Heydari, 2021. "Dynamics of consumption distribution and economic fluctuations," Economic Change and Restructuring, Springer, vol. 54(3), pages 847-876, August.
    2. Sylvanus Gaku, 2022. "Understanding Ghana’s Expenditure Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1463-1480, December.
    3. Dorji Lethro & Takahiro Akita, 2019. "The roles of education in expenditure inequality in Bhutan: an analysis in an urban–rural context," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 465-485, June.
    4. Mohsen Ayyash & Siok Kun Sek, 2020. "Decomposing Inequality in Household Consumption Expenditure in Malaysia," Economies, MDPI, vol. 8(4), pages 1-15, October.
    5. Dorji Lethro & Takahiro Akita, 2016. "Education and Expenditure Inequality in Bhutan: An Analysis based on 2007 and 2012 Household Survey Data," Working Papers EMS_2016_12, Research Institute, International University of Japan.
    6. Juzhong Zhuang & Peng Zhan & Shi Li, 2023. "Accounting for changes in income inequality in China, 2002–2018: evidence from household survey data," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(2), pages 3-26, November.
    7. Pawde, Balu & Shaw, Tara Shankar & Trivedi, Pushpa L, 2022. "Household Consumption Expenditure Inequality in Rural India: 1993-94 to 2011-12," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 57(11).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dgr:rugggd:gd-114 is not listed on IDEAS
    2. Azam, Mehtabul, 2012. "Changes in Wage Structure in Urban India, 1983–2004: A Quantile Regression Decomposition," World Development, Elsevier, vol. 40(6), pages 1135-1150.
    3. Vladimir Hlasny, 2017. "Different Faces of Inequality across Asia: Decomposition of Income Gaps across Demographic Groups," LIS Working papers 691, LIS Cross-National Data Center in Luxembourg.
    4. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    5. Amirah El-Haddad & May Gadallah, 2018. "The Informalization of the Egyptian Economy (1998-2012): A Factor in Growing Wage Inequality?," Working Papers 1210, Economic Research Forum, revised 12 Jun 2018.
    6. Essama-Nssah, B., 2012. "Identification of sources of variation in poverty outcomes," Policy Research Working Paper Series 5954, The World Bank.
    7. Rosalia Castellano & Gaetano Musella & Gennaro Punzo, 2017. "Structure of the labour market and wage inequality: evidence from European countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(5), pages 2191-2218, September.
    8. Pieters, Janneke, 2010. "Growth and Inequality in India: Analysis of an Extended Social Accounting Matrix," World Development, Elsevier, vol. 38(3), pages 270-281, March.
    9. Töpfer, Marina, 2017. "Detailed RIF decomposition with selection: The gender pay gap in Italy," Hohenheim Discussion Papers in Business, Economics and Social Sciences 26-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    10. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    11. Luis Ayala & Javier Mart n-Rom n & Juan Vicente, 2023. "What Contributes to Rising Inequality in Large Cities?," LIS Working papers 850, LIS Cross-National Data Center in Luxembourg.
    12. Shantanu Khanna & Deepti Goel & René Morissette, 2016. "Decomposition analysis of earnings inequality in rural India: 2004–2012," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-26, December.
    13. Zhu, Rong, 2016. "Wage differentials between urban residents and rural migrants in urban China during 2002–2007: A distributional analysis," China Economic Review, Elsevier, vol. 37(C), pages 2-14.
    14. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    15. Sonja C. Kassenboehmer & Mathias G. Sinning, 2014. "Distributional Changes in the Gender Wage Gap," ILR Review, Cornell University, ILR School, vol. 67(2), pages 335-361, April.
    16. Domenico Depalo & Raffaela Giordano & Evangelia Papapetrou, 2015. "Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis," Empirical Economics, Springer, vol. 49(3), pages 985-1015, November.
    17. Mathä, Thomas Y. & Porpiglia, Alessandro & Ziegelmeyer, Michael, 2017. "Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics," Journal of Housing Economics, Elsevier, vol. 35(C), pages 1-12.
    18. Rosalia Castellano & Gaetano Musella & Gennaro Punzo, 2019. "Exploring changes in the employment structure and wage inequality in Western Europe using the unconditional quantile regression," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 249-304, May.
    19. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
    20. Anglade, Boaz & Useche, Pilar & Deere, Carmen Diana, 2017. "Decomposing the Gender Wealth Gap in Ecuador," World Development, Elsevier, vol. 96(C), pages 19-31.
    21. SOLOGON Denisa & ALMEIDA Vanda & VAN KERM Philippe, 2019. "Accounting for the distributional effects of the 2007-2008 crisis and the Economic Adjustment Program in Portugal," LISER Working Paper Series 2019-05, Luxembourg Institute of Socio-Economic Research (LISER).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gro:rugggd:gd-114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hanneke Tamling (email available below). General contact details of provider: https://edirc.repec.org/data/ferugnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.