Essays on socio-economic development in India

PhD ceremony: Ms. J. Pieters, 14.30 uur, Aula Academiegebouw, Broerstraat 5, Groningen

Dissertation: Essays on socio-economic development in India

Promotor(s): prof. M.P. Timmer

Faculty: Economics and Business

This thesis contains four studies on socio-economic development in India, focusing on inequality, female labor force participation, and the informal sector. While the Indian economy has grown fast over the past two decades, some of these underlying developments have not been equally favorable.

With more than one third of the adult population illiterate, India has one of the most unequal education distributions in the world. Because the services sector and certain manufacturing industries in India make intensive use of highly educated workers, growth of these sectors generates little income for the lowly educated population. Consequently, inequality in India rises when these skill-intensive sectors expand.

Moreover, the research shows that inequality of education has increased between 1993 and 2004. This has contributed to higher consumption inequality between households, especially in rural areas. Reducing illiteracy is therefore crucial to fight consumption inequality and inequality of education itself.

There is also a study of the determinants of urban female labor force participation. Despite India’s fast growth, economic necessity still drives labor force participation for women with low education, and social restrictions remain high. Only the highly educated minority of women respond to attractive employment and earnings opportunities.

Finally, there is a analysis of the informal sector, which is a term used to describe very small firms where employees are not covered by labor laws or social security. Production links between large, formal firms and the informal sector exist, which is in line with an important strand of literature, but that they cannot explain the recent growth of informal manufacturing in India.