Earnings and Social Background: An evaluation of caste/ethnic wage differentials in the Nepalese labor market
AbstractThis paper examines the sources of wage differentials among caste/ethnic groups, employing national survey data from Nepal. Our study shows that, in countries such as Nepal which have imperfect labour markets, the conventional Oaxaca decomposition methodology fails to estimate precisely the source of wage differential. Using an extended model, occupational choice, firm size distribution and the interaction between these two are employed along with the conventionally used measures of human capital endowments of different groups, to estimate these effects. Our results indicate that the lack of access to better paying occupations and larger firms, rather than differences in human capital, are the main factors underlying the caste/ethnic wage differentia in Nepal. Furthermore, empirical evidence is not found in favour of government policy of "affirmative action" to contribute yet in narrowing down the caste/ethnic wage differential in the labour market.
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Bibliographic InfoPaper provided by Department of Economics, City University London in its series Working Papers with number 13/01.
Date of creation: 2013
Date of revision:
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Postal: Department of Economics, Social Sciences Building, City University London, Whiskin Street, London, EC1R 0JD, United Kingdom,
Phone: +44 (0)20 7040 8500
Web page: http://www.city.ac.uk
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Labour Market Discrimination; Caste; Ethnicity;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-19 (All new papers)
- NEP-DEM-2013-01-19 (Demographic Economics)
- NEP-LMA-2013-01-19 (Labor Markets - Supply, Demand, & Wages)
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