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A Division of Laborers : Identity and Efficiency in India

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  • Cassan,Guilhem
  • Keniston,Daniel
  • Kleineberg,Tatjana Karina

Abstract

Workers’ social identity affects their occupation, and therefore the structure and prosperityof the aggregate economy. The paper estimates a general equilibrium Roy model of this phenomenon in the Indian castesystem, where work and identity are particularly intertwined. New data on occupation, wages, and caste’straditional occupations and social status show that workersare over-represented in their traditional occupations and under-represented in socially higher or lower occupations.The authors consider counterfactuals removing castes’ hierarchical and occupational links. Despite more efficienthuman capital allocation, aggregate output gains are small—in some counterfactuals negative—due to weaker castenetworks and reduced learning across generations.

Suggested Citation

  • Cassan,Guilhem & Keniston,Daniel & Kleineberg,Tatjana Karina, 2021. "A Division of Laborers : Identity and Efficiency in India," Policy Research Working Paper Series 9544, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9544
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    References listed on IDEAS

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    Cited by:

    1. Boken, Johannes & Gadenne, Lucie & Nandi, Tushar & Santamaria. Marta, 2022. "Community Networks and Trade," The Warwick Economics Research Paper Series (TWERPS) 1442, University of Warwick, Department of Economics.
    2. Suanna Oh, 2023. "Does Identity Affect Labor Supply?," American Economic Review, American Economic Association, vol. 113(8), pages 2055-2083, August.
    3. Goraya, Sampreet Singh, 2023. "How does caste affect entrepreneurship? birth versus worth," Journal of Monetary Economics, Elsevier, vol. 135(C), pages 116-133.
    4. Bharathi, Naveen & Malghan, Deepak & Rahman, Andaleeb, 2023. "Ethnic diversity and economic development with spatial segregation," Economics Letters, Elsevier, vol. 222(C).

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    More about this item

    Keywords

    Labor Markets; Educational Sciences; Human Rights; Employment and Unemployment;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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