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Caste, Ethnicity and Poverty in Rural India

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Author Info

  • Gang, Ira N.

    ()
    (Rutgers University)

  • Sen, Kunal

    ()
    (University of Manchester)

  • Yun, Myeong-Su

    ()
    (Tulane University)

Abstract

This paper analyzes the determinants of rural poverty in India, contrasting the situation of the Scheduled Caste (SC) and Schedule Tribe (ST) households with the non-scheduled population. The incidence of poverty among SC and ST households is significantly higher than non-scheduled households. Using a probit decomposition analysis, we decompose the difference in the poverty rates between the scheduled castes (or tribes) and non-scheduled households into a part explained by the differences in characteristics and a part explained by the differences in probit coefficients. The paper finds that for SC households, differences in characteristics explain the gap in poverty rates more than differences in coefficients; while for ST households, it is the reverse. Differences in educational attainment explain about one quarter of the poverty gap for both social groups. Occupational structure strongly matters in determining the poverty gap for both SC and ST, as does differences in returns to individual occupations. While poverty rates are not very different between SC and ST households, the analysis suggests that the underlying factors for the higher incidence of poverty in these social groups are to a large extent different.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 629.

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Length: 32 pages
Date of creation: Nov 2002
Date of revision:
Handle: RePEc:iza:izadps:dp629

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Keywords: probit decomposition; poverty; caste; ethnicity;

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  1. Jean Dr├Ęze & Geeta Gandhi Kingdon, 1999. "School Participation in Rural India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers, Suntory and Toyota International Centres for Economics 18, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  2. Lanjouw, Peter & Ravallion, Martin & DEC, 1994. "Poverty and household size," Policy Research Working Paper Series, The World Bank 1332, The World Bank.
  3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  4. Ashwini Deshpande, 2000. "Does Caste Still Define Disparity? A Look at Inequality in Kerala, India," American Economic Review, American Economic Association, American Economic Association, vol. 90(2), pages 322-325, May.
  5. J.V. Meenakshi & Ranjan Ray, 2000. "Impact of Household Size and Family Composition on Poverty in Rural India," ASARC Working Papers, The Australian National University, Australia South Asia Research Centre 2000-02, The Australian National University, Australia South Asia Research Centre.
  6. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 90(4), pages 599-617, November.
  7. Deshpande, Ashwini, 2001. "Caste at Birth? Redefining Disparity in India," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 5(1), pages 130-44, February.
  8. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, Elsevier, vol. 54(2), pages 217-234, December.
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