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Published September 18, 2024 | Version v1
Journal article Embargoed

Minimum wages and Lighthouse Effect among Male Self-employed Workers: An Exploratory Analysis of the Non-farm Sector in India

Authors/Creators

  • 1. Madras School of Economics
  • 2. Wage Specialist, Asia and the Pacific, International Labour Organization (ILO), Bangkok

Description

Abstract: The Indian labour market is characterized by large informality and self-employment. While most of the literature on minimum wages has focused on the impact of minimum wages on wages and the employment of the ‘wage earners’, this leaves out a large proportion of the self-employed workforce (non-wage earners). Using the novel data on minimum wages and Periodic Labour Force Survey (PLFS) rounds 2017-18, 2018-19, and 2019-20, this study finds that at higher levels of minimum wages, earnings gap reduces between regular workers and self-employed (own account) workers which is an indicative of the “lighthouse effect”.

Keywords: Minimum Wage, Self-Employment, Lighthouse Effect, India

JEL Classification Number: J21, J23, J30, J31, J46, J50

Files

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The files will be made publicly available on December 31, 2050.

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