Labour Incomes in India: A Comparison of Two National Household Surveys

The COVID-19 pandemic created a need for high-frequency employment and income data. Policy-makers and researchers of developing countries typically have not had access to such data. In India, a new private high-frequency panel dataset has recently emerged as the dataset of choice for analysis of the economic impact of COVID-19. This is the Consumer Pyramids Household Survey (CPHS) conducted by the Centre for Monitoring the Indian Economy (CMIE). But the CPHS has also been criticised for being inadequately representative nationally by missing poor and vulnerable households in its sample. We examine the comparability of monthly labour income estimates for the pre-pandemic year (2018-19) for CPHS and the official Periodic Labour Force Survey (PLFS). Across different methods and assumptions, as well as rural/urban locations, CPHS mean monthly labour earnings are anywhere between 5 percent and 50 percent higher than corresponding PLFS estimates. In addition to the sampling concerns raised in the literature, we point to differences in the way employment and income are captured in the two surveys as possible causes of these differences. While CPHS estimates are always higher, it should also be emphasised that the two surveys agree on some stylised facts regarding the Indian workforce. An individual earning (sic)50,000 per month lies in the top 5 percent of the income distribution in India as per both surveys. Second, both PLFS and CPHS show that half the Indian workforce earns below the recommended National Minimum Wage.