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International Journal of Innovations & Research Analysis (IJIRA) [ Vol. 6 | No. 2(II) | April - June, 2026 ]

District-Level Salary Trends and Regional Economic Convergence: Evidence from Gujarat

Patel Hetalben Pragjibhai & Dr. Nitu Rajput

This study investigates district-level salary trends and tests for regional economic convergence across Gujarat’s 33 districts over a fifteen-year panel (2008–2023). Using a harmonised dataset drawn from the Annual Survey of Industries (ASI), Periodic Labour Force Survey (PLFS), Employee Provident Fund Organisation (EPFO) administrative records, and state government payroll data, we construct a comprehensive District Salary Index (DSI) that encompasses both formal and informal employment across agriculture, manufacturing, construction, and services. The analysis employs three complementary methodological frameworks: (i) absolute and conditional β-convergence regressions in a panel fixed-effects specification with time-varying controls; (ii) σ-convergence analysis tracking cross-sectional wage dispersion over time; and (iii) non-parametric distributional dynamics via stochastic kernel estimation to characterise the full transition of the district wage distribution. Empirical results confirm conditional β-convergence at a speed of 3.4% per annum (half-life approximately 20 years), driven primarily by catch-up in the lagging eastern tribal belt districts of Dahod, Narmada, Chhota Udaipur, and Dang. Stochastic kernel estimates reveal bimodal persistence in the wage distribution, reflecting a polarisation between a high-wage industrial cluster (Ahmedabad, Surat, Vadodara, Bharuch) and a mid-to-low wage rural periphery. Infrastructure endowment, manufacturing employment density, and proximity to Special Economic Zones (SEZs) are identified as robust determinants of both wage levels and convergence speed. Robustness checks using synthetic panel methods and Bonferroni-corrected multiple inference confirm the baseline findings. The paper concludes with evidence-based recommendations for spatially targeted industrial policy, skills development, and infrastructure investment to accelerate inclusive convergence.

Pragjibhai, P. & Rajput, N. (2026). District-Level Salary Trends and Regional Economic Convergence: Evidence from Gujarat. International Journal of Innovations & Research Analysis, 06(02(II)), 101–111. https://doi.org/10.62823/IJIRA/6.2(II).9110
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DOI:

Article DOI: 10.62823/IJIRA/6.2(II).9110

DOI URL: https://doi.org/10.62823/IJIRA/6.2(II).9110

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