New Delhi, June 8 -- An important insight from the World Bank's latest South Asia Economic Update should unsettle some assumptions in India's employment debate.

According to the report, only about one-fifth of wage differences across Indian states can be explained by worker characteristics like education, experience or skill. The rest arise from where people work, including factors like the density of economic activity, transport connectivity, urban scale and quality of the surrounding economic ecosystem.

Put differently, wages depend more on the place than the person in India today.

For years, the national conversation has focused on whether enough jobs are being created. But an economy can generate employment while still leaving work...