Industrial Growth and Wage Structure: An Inter-Regional Analysis

The structure of wages and wage determinants has always received attention in economic theories and policies. During the liberalized era, despite labour productivity, market based policies have gained importance in determining the wages. In the present study, the following issues are addressed: (a) How far the present pattern of industrial growth is responsible for the changing wage structure?, (b) Does all the states of India follow the similar wage structure irrespective of their development levels?, and (c) To what extent the structure of industrial growth and policies determine the wage share, average wage and wage disparity? The study undertakes a regional level approach. With the help of industry level data collected from Annual Survey of Industries, the study examines the structural changes in manufacturing industries after liberalization, links the productivity with wages and finds the regional wise differences in wage structure. The variations in wage share, average wage and wage disparity are estimated with the help of ordinary least squares method.