Wage Discrimination in India's Informal Labor Markets: Exploring the Impact of Caste and Gender


  • Financial support from the TFESSD Trust Fund and the DFID-World Bank collaborative program is gratefully acknowledged. Tore Olsen and Sonal Vats provided excellent research assistance. The views and opinions expressed in this paper are solely those of the authors.

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Although there has been considerable interest in wage discrimination in India, available studies have largely dealt with formal rather than informal markets that are of little relevance for the poorest people. Focusing on India's informal labor markets leads to three findings of interest. First, gender wage discrimination is larger in informal than in formal labor markets, resulting in losses that are larger than receipts from one of the country's most important safety-net programs. Second, economic growth will not make gender discrimination in wage labor markets disappear. Finally, contrary to what is found for gender, the hypothesis of no significant wage discrimination based on caste cannot be rejected.