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Evidence of Earnings Inequality Based on Caste in Nepal

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  • Menuka Karki
  • Alok K. Bohara

Abstract

type="main"> In this article, the monthly earnings gap between Dalit and non-Dalit caste members in Nepal is estimated using two methods: Blinder-Oaxaca decomposition method and the matching-based nonparametric decomposition method. The nonparametric decomposition method estimates the monthly earnings gap based on a one-to-many matching of the given income-generating characteristics, taking into account the differences in the support of the distribution of those characteristics for Dalits and non-Dalits. According to the results, the majority of the earnings gap between Dalits and non-Dalits is attributed to the endowment effect. Dalits earn less than non-Dalits because Dalits have some characteristics that non-Dalits do not, that are unfavorable in the labor market. That this endowment effect works against Dalits could be a reflection of the social exclusion and job segregation faced by Dalits in the past.

Suggested Citation

  • Menuka Karki & Alok K. Bohara, 2014. "Evidence of Earnings Inequality Based on Caste in Nepal," The Developing Economies, Institute of Developing Economies, vol. 52(3), pages 262-286, September.
    • Handle: RePEc:bla:deveco:v:52:y:2014:i:3:p:262-286
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    File URL: http://hdl.handle.net/10.1111/deve.12049
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    1. Wagle, Udaya R. & Devkota, Satis, 2018. "The impact of foreign remittances on poverty in Nepal: A panel study of household survey data, 1996–2011," World Development, Elsevier, vol. 110(C), pages 38-50.
    2. Soumyajit Chakraborty & Alok K. Bohara, 2021. "The Cost of Being ‘Backward’ in India: Socio-religious Discrimination in the Labour Market," Indian Journal of Human Development, , vol. 15(2), pages 252-274, August.
    3. Chandan Sharma & Sudharshan Reddy Paramati, 2018. "Measuring Inequality of Opportunity for the Backward Communities: Regional Evidence from the Indian Labour Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(2), pages 479-503, July.
    4. Pallavi Gupta & Satyanarayan Kothe, 2021. "Interpreting the Caste-based Earning Gaps in the Indian Labour Market: Theil and Oaxaca Decomposition Analysis," Papers 2110.06822, arXiv.org.
    5. Kishor Atreya & Narayan Sharma Rimal & Prabina Makai & Manish Baidya & Jiban Karki & Gerda Pohl & Sunita Bhattarai, 2023. "Dalit’s livelihoods in Nepal: income sources and determinants," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 12629-12657, November.

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