and an Employment and Unemployment Survey (EUS). Round 50 was carried out from July 1993 to June 1994 and EUS covered a sample of approximately 565,000 individuals (115,400 households); Round 55 took place between July 1999 and June 2000 and EUS covered about 595,500 individuals in 120,400 households. This study uses the 1993-94 and 1999-00 EUSs.<sup>**4**</sup> EUS instruments are broadly similar for the 50<sup>th</sup> and 55<sup>th</sup> rounds, and gather information about demographic characteristics of household members, weekly time disposition, and their main and secondary job activities. Twenty principle job activities are defined consistently across the two survey rounds for all household members. These activities distinguish all respondents and their family members as: self-employed, regular salaried worker, casual wage laborer, unemployed, or domestic worker, among others. Employed respondents are asked a wide-range of questions about their main job (industry, occupation, type and size of enterprise, etc.), as well as about their subsidiary economic activities. Only those who work at regular salaried jobs or as casual laborers are asked to report their weekly wages (both cash and in-kind).<sup>5</sup> The sample selected for this analysis consists of those employed and working for wages (leaving out those who are self-employed and work for profit and unpaid family workers), see Figure 1. We define total wages as the sum of weekly cash and in-kind wages from the principal activity. We adjust nominal wages for differences in price levels across urban and rural areas and states, and for temporal changes in price levels between 1993 and 1999, using the indexes developed by Deaton and Tarozzi (2000). Thus, all wages in the paper are expressed in terms of the 1999 average of India’s rural prices.

Workers engaged in salaried occupations were asked about the type of enterprise where they carried out their main work activity. In the 50<sup>th</sup> round, all salaried workers were asked to choose from three categories: public, private, or semipublic, and we

> 4 These cross-sectional surveys use a two-stage stratified sampling design, and are representative of the national, state, and so-called “NSS region” level. The first-stage sampling units (FSUs) are census villages in the rural areas, and the NSS Urban Frame Survey (UFS) are blocks in the urban areas. The second stage units are the households in both urban and rural sectors. For more information on the survey and sample design see, e.g., NSSO, Ministry of Planning (1994, 2000).

> 5 In the 50th round, the sector of employment – public or private – is defined only for those engaged in regular salaried/wage work (in all industrial activities), while in the 55<sup>th</sup> round, it is defined for those who are employed in non-agricultural activities. In both rounds, wages are defined for everyone who reported being employed. In order to maintain consistency and comparability across the two rounds, the classification of the sector of employment was defined only for those with regular salaried/wage employment in non-agricultural industries. We also excluded casual workers in public works as well as individuals who were sick or did not work for other reasons.

10