Wage GAP, JOB Contract and employment status: A study with micro-level data in India

This study examines the extent of wage gap between workers in permanent and temporary jobs at different locations of the wage distribution by evaluating the impact of workers ’characteristics and education. The differential effects of the covariates on wage gap at different locations of the wage distribution are estimated by applying quantile regression model. The wage gap between temporary and permanent employment is decomposed into endowment effect based on the difference in labour market characteristics and coefficient effect based on the difference in returns for the same characteristics. The study observes that the wage gap between temporary and permanent workers is wider in the upper tail of distribution. The decomposition analysis suggests that the wage gap presents in the Indian labour market primarily because of discrimination measured by the coefficients effects.