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Caste Stratification and Wealth Inequality in India

  • Zacharias, Ajit
  • Vakulabharanam, Vamsi

We analyze the relationship between wealth inequality and caste divisions in India using nationally representative surveys on household wealth conducted during 1991–92 and 2002–03. According to our findings, the groups in India that are generally considered disadvantaged (known as Scheduled Castes or Scheduled Tribes) have, as one would expect, substantially lower wealth than the “forward” caste groups, while the Other Backward Classes and non-Hindus occupy positions in the middle. Using the ANOGI decomposition technique, we estimate that between-caste inequality accounted for about 13% of overall wealth inequality in 2002–03. The stratification parameters indicate that the forward caste Hindus overlap little with the other caste groups, while the latter have significantly higher degrees of overlap with one another and with the overall population. Using this method, we are also able to comment on the emergence and strengthening of a “creamy layer,” or relatively well-off group, among the disadvantaged groups, especially the Scheduled Tribes.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 10 ()
Pages: 1820-1833

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:10:p:1820-1833
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  1. Subramanian, S. & Jayaraj, D., 2006. "The Distribution of Household Wealth in India," Working Paper Series RP2006/116, World Institute for Development Economic Research (UNU-WIDER).
  2. Yitzhaki, Shlomo, 1994. "Economic distance and overlapping of distributions," Journal of Econometrics, Elsevier, vol. 61(1), pages 147-159, March.
  3. Bourguignon, Francois & Ferreira, Francisco H. G., 2002. "Beyond Oaxaca-Blinder : accounting for differences in household income distributions across countries," Policy Research Working Paper Series 2828, The World Bank.
  4. Deshpande, Ashwini, 2001. "Caste at Birth? Redefining Disparity in India," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 130-44, February.
  5. Abhijit Banerjee & Esther Dufloi & Maitreesh Ghatak & Jeanne Lafortune, 2012. "Marry for What? Caste and Mate Selection in Modern India," Documentos de Trabajo 423, Instituto de Economia. Pontificia Universidad Católica de Chile..
  6. 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.
  7. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2004. "Using Analysis of Gini (ANoGi) for Detecting Whether Two Sub-Samples Represent the Same Universe: The SOEP Experience," IZA Discussion Papers 1049, Institute for the Study of Labor (IZA).
  8. Vani K. Borooah, 2005. "Caste, Inequality, and Poverty in India," Review of Development Economics, Wiley Blackwell, vol. 9(3), pages 399-414, 08.
  9. Ashwini Deshpande, 2000. "Does Caste Still Define Disparity? A Look at Inequality in Kerala, India," American Economic Review, American Economic Association, vol. 90(2), pages 322-325, May.
  10. Milanovic, Branko & Shlomo Yitzhaki, 2001. "Decomposing world income distribution : does the world have a middle class ?," Policy Research Working Paper Series 2562, The World Bank.
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