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Earnings Inequality in India: Has the Rise of Caste and Religion Based Politics in India Had an Impact?

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  • Bhaumik, Sumon K.

    () (University of Sheffield)

  • Chakrabarty, Manisha

    () (Indian Institute of Management)

Abstract

Since 1989, there has been a sharp increase in the role of caste and religion in determining political fortunes at both state and federal levels in India. As a consequence, significant inter-caste and inter-religion differences in earnings have the potential to stall the process of economic reforms. Yet, the patterns and determinants of such differences remain unexplored. We address this lacuna in the literature, and explore the determinants of the differences in inter-caste and inter-religion earnings in India during the 1987-99 period, using the 43rd and 55th rounds of National Sample Survey (NSS). Our results suggest that (a) earnings differences between "upper" castes and SC/ST have declined between 1987 and 1999, (b) over the same period, earnings differences between Muslims and non-Muslims have increased, to the detriment of the former, and (c) inter-caste and inter-religion differences in earnings can be explained largely by corresponding differences in educational endowment and returns on age (and, hence, experience). However, differences in returns on education do not explain inter-caste and inter-religion earnings differences to a great extent.

Suggested Citation

  • Bhaumik, Sumon K. & Chakrabarty, Manisha, 2006. "Earnings Inequality in India: Has the Rise of Caste and Religion Based Politics in India Had an Impact?," IZA Discussion Papers 2008, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2008
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    References listed on IDEAS

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    1. Krishna, Anirudh, 2006. "Pathways out of and into poverty in 36 villages of Andhra Pradesh, India," World Development, Elsevier, vol. 34(2), pages 271-288, February.
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    7. Meenakshi, J. V. & Ray, Ranjan, 2002. "Impact of household size and family composition on poverty in rural India," Journal of Policy Modeling, Elsevier, vol. 24(6), pages 539-559, October.
    8. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics.
    9. Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    10. Kijima, Yoko, 2006. "Why did wage inequality increase? Evidence from urban India 1983-99," Journal of Development Economics, Elsevier, vol. 81(1), pages 97-117, October.
    11. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
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    Cited by:

    1. Ira N. Gang & Kunal Sen & Myeong-Su Yun, 2008. "Was the Mandal Commission Right? Living Standard Differences between Backward Classes and Other Social Groups in India," CEDI Discussion Paper Series 08-12, Centre for Economic Development and Institutions(CEDI), Brunel University.
    2. Mehtabul Azam, 2012. "A distributional analysis of social group inequality in rural India," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(4), pages 415-432, May.
    3. Bhalotra, Sonia & Valente, Christine & van Soest, Arthur, 2010. "The puzzle of Muslim advantage in child survival in India," Journal of Health Economics, Elsevier, vol. 29(2), pages 191-204, March.
    4. Ira N. Gang & Kunal Sen & Myeong-Su Yun, 2008. "Poverty In Rural India: Caste And Tribe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(1), pages 50-70, March.
    5. Majumder, Rajarshi & Ray, Jhilam, 2016. "Development and Exclusion: Intergenerational Stickiness in India," MPRA Paper 71182, University Library of Munich, Germany.
    6. Carlos Gradín, 2018. "Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach," WIDER Working Paper Series 024, World Institute for Development Economic Research (UNU-WIDER).
    7. Borooah, Vani & Diwakar, Dilip & Naik, Ajaya & Sabharwal, Nidhi, 2013. "Caste, Inequality, and Poverty in India: A Re-Assessment," MPRA Paper 75669, University Library of Munich, Germany.
    8. repec:spr:sochwe:v:50:y:2018:i:3:d:10.1007_s00355-017-1093-1 is not listed on IDEAS
    9. Francavilla, Francesca & Giannelli, Gianna Claudia, 2011. "Does family planning help the employment of women? The case of India," Journal of Asian Economics, Elsevier, vol. 22(5), pages 412-426, October.

    More about this item

    Keywords

    caste; inequality; India; religion;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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