Selection And Women's Wages Over Time : Evidence From India

Between 1983 and 2011, the average real wage increased by 149% and 55% for Indian married women and men, respectively. At the same time, there was rapid economic growth (between 6% and 7% per year) as well as rising educational attainment in India. I use data from India's National Sample Survey to construct a unique sample of matched husband-wife pairs. I employ the Gronou-Heckman-Roy model and Heckman's two- step estimator to study how the change in observed wages and gender wage gap reflects the changing composition of the female workforce. The two-step estimates show that selection into wives' wage employment is consistently negative, however, is becoming less negative from -0.379 log points in 1983 to -0.181 log points in 2011. In addition, the two-step estimates of the gender wage gap show a moderate increase (in absolute value) from a -0.455 to a -0.503 log wage point differential over study period