Employment, Wages and Inequality in India: An Occupations and Tasks Based Approach

Abstract

This paper analyzes the employment and wage trends for Indian workers for the period 2005–2012 by computing the task-content of occupations (Autor et al. in Q J Econ 118(4):1279–1333, 2003a; Autor et al. in Rising Wage Inequality: The Role of Composition and Prices, National Bureau of Economic Research, Cambridge, MA, 2003b; Acemoglu and Autor in Skills, Tasks and Technologies: Implications for Employment and Earnings, 2011; Autor and Dorn 2013). Three main occupation categories are obtained- routine manual, routine cognitive and non-routine cognitive. The analyses reveal evidence of job polarization for India - middle skilled jobs that are most likely to be routine cognitive, have the lowest share in employment, whereas routine manual jobs have much higher shares in employment. Further, the share of non-routine cognitive jobs has been increasing over the period under consideration at the expense of routine manual jobs. While the share of routine cognitive jobs is low, it does not reflect a substantial decline over the period. Finally, while analyzing wage trends the author finds that the average wages of workers engaged in non-routine cognitive tasks is rising the fastest, followed by those engaged in routine cognitive tasks, while average wages of workers in routine-manual tasks have witnessed the lowest rate of growth.