Minimum wage – Does it play a crucial role in reducing poverty? : The case of India

Minimum wage – Does it play a crucial role in reducing poverty? : The case of India
Author(s):
Haseena T S
Keywords:
Poverty reduction, Minimum wage policy, Social security, Minimum wage.
Abstract
The study aims to analyze the impact of the amelioration of the Minimum Wage Policy in 2015 by the government of India, with the primary focus on reducing poverty in the nation. To capture its effect, the study has considered the incidence of poverty, its intensity as well as the severity of poverty. The marginal contribution of the minimum wage to the observed changes was determined using a decomposition methodology, which also considered other variables such as pension and social assistance benefits in addition to the wage floor. The importance of the minimum wage for reducing poverty has been particularly given emphasis on the Northern region of India since it consists of the majority of poor households and wage laborers in the nation. Between 2015 and 2019, the minimum wage led to a 37.6% decline in the percentage of indigent people, a 38.4% decrease in the intensity of poverty and 41.2% reduction in the poverty severity. The results indicate that there should be due focus provided to the inclusion of minimum wage in the income of the poor people in backward areas, in this context, the Northern region of India.
Article Details
Unique Paper ID: 160276 Publication Volume & Issue: Volume 10, Issue 1 Page(s): 97 - 106
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