DEPP working paper

This Working Paper is part of the Development Economics and Public Policy series

Earnings Inequality in Sri Lanka

Thankom Arun and Vani Borooah

Abstract

Since the 1990s, accelerating economic growth has regained its dominance in the anti poverty strategies. However, the rising tendency of income inequity at the global level and within the countries emphasises the need to incorporate distributional factors to make the pro-poor growth strategies effective. This paper explores the sources of this surge in income inequality in a developing country context. The paper attempts to estimate an earnings function for Sri Lanka based on the household expenditure survey. The earners are distinguished by ethnicity, gender, sectors of employment, place of residence, education and occupation. One of the significant results of this study is that there was no 'ethnic effect' per se on earnings on Sri Lanka. Having seen a significant gender effect in earnings, the paper further attempts to calculate the degree to which this gender difference in earnings represents 'discrimination' against women.

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