The determinants of earnings among low-income workers in Bombay: An analysis of panel data

This article estimates the determinants of earnings among workers in low income settlements of Bombay. It uses panel data on workers in two homeless (pavement-dwelling) communities and two slum communities. The estimated earnings functions, adjusted for community- and time-specific fixed effects, show a good fit. Age and education are significant in all the regressions; however, some of the job-related variables appear to be more important than the standard human capital variables in determining earnings. In conclusion, while a complex set of factors seem to determine earnings of workers in low-income communities, institutional factors play an important role.