Migrant and non-migrant wage differentials: a quintile decomposition analysis for India

Abstract

The objective of this paper is to quantify the wage gap between internal migrant and non-migrant workers in India. Using unit-level data from the National Sample Survey (NSS) for the years 1999–2000 and 2007–2008, we analysed the wage differential with Oaxaca-Blinder decomposition adjusted for sample selection bias. Further, we analysed the wage gap across the distribution using quantile decomposition analysis. The estimated results show that, on average, migrant workers earn higher wages than non-migrant workers and have higher returns to education in both rural and urban areas. However, migrant workers belonging to Scheduled Tribes (ST) and Scheduled Castes (SC), and female migrants, have a wage disadvantage compared to non-migrant workers with similar characteristics. Across the wage distribution, the wage decomposition shows, wages are lower for migrants than non-migrants at the lower end but higher at the higher end. The major part of this trend is explained by observable characteristics. The wage disadvantage at the lower end seems to be because of the over-representation of females among migrants in casual work. When the analysis was conducted only for regular male workers, it was found that migrants have a wage advantage across the wage distribution.