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Inter-Caste Differences in Formal Sector Earnings in India: Has the Rise of Caste-Based Politics had an Impact?


  • Sumon Kumar Bhaumik

    () (Brunel University)

  • Manisha Chakrabarty

    () (Keele University, Centre for Economic Research and School of Economic and Management Studies)


Since 1989, there has been a sharp increase in the role of caste in determining political fortunes at both state and federal levels in India. As a consequence, significant inter-caste 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 earnings in India during the 1987-99 period, using the 43rd and 55th rounds of National Sample Survey (NSS). Our results suggest that earnings differences between upper castes and SC/ST have declined between 1987 and 1999, and (b) inter-caste 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 earnings differences to a great extent.

Suggested Citation

  • Sumon Kumar Bhaumik & Manisha Chakrabarty, 2006. "Inter-Caste Differences in Formal Sector Earnings in India: Has the Rise of Caste-Based Politics had an Impact?," Keele Economics Research Papers KERP 2006/13, Centre for Economic Research, Keele University.
  • Handle: RePEc:kee:kerpuk:2006/13
    Note: Revised from an earlier paper, "Earnings Inequality in India: Has the Rise of Caste and Religion Based Politics in India had an Impact?", IZA Discussion paper No 2008, March, 2006. The authors would like to thank Ralitza Dimova, Olivier Bargain, Zhang Zhou, Indraneel Dasgupta and seminar participants at Keele University for their helpful comments. They remain responsible for all remaining errors.

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    Inequality; Caste; India;

    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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