Gender-Based Wage Differentials in India: Evidence Using a Matching Comparisons Perspective

Tushar Agrawal, National Council of Applied Economic Research

This paper examines gender wage differentials in India using the matching comparison methodology proposed by Ñopo (2008). This method is a non-parametric alternative to the standard Blinder-Oaxaca decomposition method. The method considers the problem of gender differences in the supports and allows the decomposition of the total wage gap into four components. Three of the components can be attributed to the existence of differences in individual’s characteristics while the other is the unexplained part of the gap. The analysis is carried out using the nationally representative India Human Development Survey. We find a large wage gap that is more pronounced in rural areas than in urban. In both sectors, differences in individuals’ characteristics explain a small proportion of the total wage gap. Further, occupational characteristics play an important role in explaining the wage differential. A large part of the gap remains unexplained which suggests within-occupation labor market discrimination against women.