Inter and intra sectoral wage determinants in Indian casual-labor market: Agricultural and structural change implications

Abstract

The study estimates marginal impacts of household specific determinants (demographic, skill, security and mobility factors) on wages earned by laborers belonging to different quantile classes in agriculture and non-agricultural sectors. The results demonstrate superiority of varying-coefficients approach (Quantile Regression) over constant-coefficient approach (OLS) in terms of robustness and wider policy implications of estimated associations between variables. Different factors affect wages differently across different quantile classes which imply that policies aiming towards improving wages shall have differential strategies for specific target group. The evidences clearly point towards a strong need to raise education level and impart technical skills to laborers for improving their income, accelerating employment diversification towards non-farm sectors and equitable development in the society. Largely, Indian labor market has been found to be informal and unorganized. The access to social security benefits bears positive association with the wages.