Caste Discrimination and Transaction Costs in the Labor Market: Evidence from Rural North India
AbstractThis 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 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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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d06-200.
Date of creation: Jan 2007
Date of revision:
regular employment; casual employment; labor market; India;
Other versions of this item:
- Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, vol. 88(2), pages 292-300, March.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-23 (All new papers)
- NEP-CWA-2007-01-23 (Central & Western Asia)
- NEP-DEV-2007-01-23 (Development)
- NEP-LAB-2007-01-23 (Labour Economics)
- NEP-SOC-2007-01-23 (Social Norms & Social Capital)
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