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

• Main Authors: Nidhiya Menon, Yana van der Meulen Rodgers
• Format: Article
• Language: English
• Published: The MIT Press 2017-03-01
• Series: Asian Development Review
• Subjects: employment; gender; India; minimum wage; wages
• Online Access: https://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00080

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.