Narrow Results

This paper uses the task-content-of-occupations framework to analyze trends in employment and wages of female and male workers in the Indian labor market from 1994 to 2017. Workers are classified into four main occupational categories: nonroutine cognitive, routine cognitive, nonroutine manual, and routine manual. Decomposing the changes in employment shares into between-industry changes and within-industry changes across occupational categories reveals that within-industry employment changes have increasingly played an important role, suggesting the growing importance of using the task-content framework to analyze labor market trends. The biggest increase in employment shares is for nonroutine cognitive occupations for both female and male workers. The wage analysis reveals that, on average, the gender wage gap has been lowest in routine cognitive occupations for most of the period of analysis. However, the analysis finds no consistent, significant changes in wages based on occupational specialization during the period of analysis.

I present a model of the health capital investment decision of a firm using a moral hazard framework. Health capital investment increases the probability that a worker is present and productive. The firm cannot verify a worker's health capital investment decision. When a firm invests in health capital, the investment is verifiable because the firm contracts with the insurer. I derive the optimal contract for when the worker and for when the firm invests in health capital. When the firm invests in health capital, the level of investment is higher and wages are less volatile. In my model, firms invest more than workers because of a production externality and because it is less costly to invest in health capital than to compensate the worker for bearing the risk of an uncertain labor realization. This result improves welfare, contrary to the benchmark that workers consume more health care than is efficient ex post when firms provide health insurance. Unlike the benchmark model of a worker and insurer, my model includes a profit maximizing firm, includes an endogenous probability of getting sick, and allows the insurer to set premiums by anticipating the health care investment level of the insured.

We examine the impact of pandemics on equilibrium in an integrated epidemic-economy model with production. Two types of technologies are considered: a neo-classical technology and one capturing the notion of time-to-produce. The impact of a shelter-in-place policy with and without layoffs is studied. The paper documents adjustments in interest rate, market price of risk, stock market and real wage as the epidemic propagates. It shows the qualitative effects of a shelter-in-place policy in the model are consistent with the patterns displayed by the stock market and real wage during the COVID-19 outbreak. Puzzles emerging from the analysis are outlined.

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

This paper examines the differential effects, based on the size of the plant, of industry-level foreign direct investment (FDI) on plant-level employment and the wages of skilled and unskilled workers in India's manufacturing sector. On average, there are strong positive differential effects of increased inward-level FDI for large plants relative to small and average-sized plants in terms of employment and the average wages of both skilled and unskilled workers. Small plants experience negative effects from inward FDI, which can be explained by intra-industry reallocation of output from smaller to larger plants. After conducting a regional analysis, I find positive spillovers to small plants in Indian states that receive large and persistent flows of FDI. This suggests that a critical mass of FDI is necessary for small plants to experience positive spillover effects.

This paper uses labor force survey data from India for 2000 and 2012 to examine how wages behave over the course of structural transformation. We find that wage employment between 2000 and 2012 displays the patterns one would expect for an economy undergoing structural transformation, with employment shares shifting from agriculture to industry and services, and from rural to urban areas and larger cities within urban areas. These shifts, as well as a shift to nonroutine occupations and routine manual occupations outside of agriculture, are associated with an improvement in average wages. Finally, simple Mincerian wage regressions confirm that jobs in larger firms and big cities are associated with significantly higher wages—even more so for women. Overall, our results are consistent with the notion that policies that encourage the expansion of the formal sector and employment in larger firms are crucial for development.