I use the economic growth observed in India in the 2000s, to assess its impact on inequality amongst urban households. I also deal with non-random sampling in Round 66 of the Household Consumer Expenditure surveys, by assigning probability weights. I find that inequality has decreased overall from 1994-95 to 2009-10, while the difference in inequality between the bottom and top of the expenditure distribution amongst urban population has increased. Using intra-decile analysis, I find that inequality within the bottom 10% of the urban population has decreased, while at the same time inequality within the lower middle class has increased. I test the effect of economic growth on inequality, within the Marginal Productivity Theory model; I find no support at State level. I find that States with high percentage of casual labour, as part of their urban population, are more likely to experience in increase in inequality, while there is also some support around growth in the Services sector to have a positive effect on increasing inequality, within the 5-year time frame. Finally, I find no support for Social Security and Welfare government spending to have an impact on inequality, at State level.
|Publication status||In preparation - 2019|
- GDP growth
- Household survey data