Advances in Economics and Business Vol. 6(4), pp. 232 - 240
DOI: 10.13189/aeb.2018.060404
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Reflecting on Contemporary India's Rising Inequality: Does Differential Rate of Return to Education Matter?


Sudip Chakraborty 1,2,*
1 Human Rights Centre, Law School as Fulbright Visiting Lecturer in 2008, University of Minnesota, USA
2 Department of Economics, Ananda Chandra College, Jalpaiguri, West Bengal 735101, India

ABSTRACT

India's rising income inequality to large extent is caused by the enormous difference in learning outcomes after completion of education. Decomposition analysis of India's current state of inequality points out that rural income inequality causes this outcome. The interstate difference in mean income and the urban-rural gap of mean income within states are often held responsible for giving rise to India's current state of income inequality. Intra-state income inequality is no less responsible. Non-farm sector has been expanding rapidly and within that category service sector is expanding. Service sector works need skills in various trades. Thus, unskilled and semi-skilled workers are left out in this new pattern. Formal employment is also characterized by duel wage structure. Income disparity or earning differential has its roots embedded in education delivery system in particular and human capital formation in general. The state must create opportunities for growth for all through provisioning of universal quality education and healthcare.

KEYWORDS
Inclusive Growth, Non-farm Sector, Dual Wage Structure, Wealth Inequality

Cite this paper
Sudip Chakraborty . "Reflecting on Contemporary India's Rising Inequality: Does Differential Rate of Return to Education Matter?." Advances in Economics and Business 6.4 (2018) 232 - 240. doi: 10.13189/aeb.2018.060404.