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Caste discrimination and transaction costs in the labor market: Evidence from rural North India

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Ito, Takahiro

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Abstract

This paper is an empirical attempt to quantify caste-based discrimination in the labor market using household data taken from rural North India. In the regression analysis, transaction costs associated with entry into the labor market and reservation wages are estimated simultaneously along with market wages. The estimation results provide evidence of the existence of transaction costs in the labor market and discrimination against backward classes with regard to access to regular employment. In line with previous studies, the results suggest that the achievements of India's reservation policy so far have at best been limited. In addition, a comparison between the estimates from the model employed in this paper and conventional (reduced-form) approaches shows that discrimination in labor market entry is likely to be underestimated in the conventional reduced-form approaches.

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Publisher Info
Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 88 (2009)
Issue (Month): 2 (March)
Pages: 292-300
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Handle: RePEc:eee:deveco:v:88:y:2009:i:2:p:292-300

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Keywords: Regular employment Casual employment Labor market India;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Takashi Kurosaki & Humayun Khan, 2006. "Human Capital, Productivity, and Stratification in Rural Pakistan," Review of Development Economics, Blackwell Publishing, vol. 10(1), pages 116-134, 02. [Downloadable!] (restricted)
  2. Deolalikar, Anil B, 1988. "Nutrition and Labor Productivity in Agriculture: Estimates for Rural South India," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 406-13, August. [Downloadable!] (restricted)
  3. Rose, Elaina, 2001. "Ex ante and ex post labor supply response to risk in a low-income area," Journal of Development Economics, Elsevier, vol. 64(2), pages 371-388, April. [Downloadable!] (restricted)
  4. Ronald Oaxaca, . "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  5. Jacoby, Hanan G, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Blackwell Publishing, vol. 60(4), pages 903-21, October. [Downloadable!] (restricted)
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  6. Geeta Gandhi Kingdon, Jeemol Unni, 2001. "Education and Women’s Labour Market Outcomes in India," Education Economics, Taylor and Francis Journals, vol. 9(2), pages 173-195, August. [Downloadable!] (restricted)
  7. Peter Lanjouw, 2007. "Rural Non-Farm Employment in India: Access, Income, farm, Poverty Impact," Working Papers id:913, esocialsciences.com. [Downloadable!]
  8. Ito, Takahiro & Kurosaki, Takashi, 2006. "Weather Risk and the Off-­Farm Labor Supply of Agricultural Households in India," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25774, International Association of Agricultural Economists. [Downloadable!]
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  10. Banerjee, Biswajit & Knight, J. B., 1985. "Caste discrimination in the Indian urban labour market," Journal of Development Economics, Elsevier, vol. 17(3), pages 277-307, April. [Downloadable!] (restricted)
  11. Arrow, Kenneth J, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring. [Downloadable!] (restricted)
  12. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September. [Downloadable!]
  13. Key, Nigel & Sadoulet, Elisabeth & de Janvry, Alain, 2000. " Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(2), pages 245-59, May. [Downloadable!] (restricted)
  14. Vani K. Borooah, 2005. "Caste, Inequality, and Poverty in India," Review of Development Economics, Blackwell Publishing, vol. 9(3), pages 399-414, 08. [Downloadable!] (restricted)
  15. Weinberger, Katinka, 2003. "The Impact Of Micronutrients On Labor Productivity: Evidence From Rural India," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25897, International Association of Agricultural Economists. [Downloadable!]
  16. Geeta Gandhi Kingdon, 1997. "Does the Labour Market Explain Lower Female Schooling in India?," STICERD - Development Economics Papers 01, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Takahiro Ito, 2009. "Education and Its Distributional Impacts on Living Standards," Global COE Hi-Stat Discussion Paper Series gd09-080, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
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