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Poverty in Rural India: Ethnicity and Caste


  • Ira N. Gang

    () (Rutgers University)

  • Kunal Sen

    () (University of Manchester)

  • Myeong-Su Yun

    () (Tulane University)


This paper analyzes the determinants of rural poverty in India, contrasting the situation of scheduled caste (SC) and scheduled tribe (ST) households with the non-scheduled population. The incidence of poverty in SC and ST households is much higher than among non-scheduled households. By combining regression estimates for the ratio of per capita expenditure to the poverty line and an Oaxaca-type decomposition analysis, we study how these differences in the incidence of poverty arise. We find that for SC households, differences in characteristics explain the gaps in poverty incidence more than differences in transformed regression coefficients. In contrast, for ST households, the transformed regression coefficients play the more important role.

Suggested Citation

  • Ira N. Gang & Kunal Sen & Myeong-Su Yun, 2006. "Poverty in Rural India: Ethnicity and Caste," Departmental Working Papers 200634, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:200634

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    References listed on IDEAS

    1. repec:pri:rpdevs:deaton_tarozzi_prices_poverty is not listed on IDEAS
    2. Ashwini Deshpande, 2001. "Caste at Birth? Redefining Disparity in India," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 130-144, February.
    3. William E. Even & David A. Macpherson, 1993. "The Decline of Private-Sector Unionism and the Gender Wage Gap," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 279-296.
    4. Gang, Ira N. & Sen, Kunal & Yun, Myeong-Su, 2002. "Caste, Ethnicity and Poverty in Rural India," IZA Discussion Papers 629, Institute for the Study of Labor (IZA).
    5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    6. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
    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. 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.
    9. Vani K. Borooah, 2005. "Caste, Inequality, and Poverty in India," Review of Development Economics, Wiley Blackwell, vol. 9(3), pages 399-414, August.
    10. repec:pri:rpdevs:deaton_tarozzi_prices_poverty.pdf is not listed on IDEAS
    11. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February.
    12. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, vol. 54(2), pages 217-234, December.
    13. Ham, John C & Svejnar, Jan & Terrell, Katherine, 1998. "Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from the Czech and Slovak Republics," American Economic Review, American Economic Association, vol. 88(5), pages 1117-1142, December.
    14. Dreze, Jean & Kingdon, Geeta Gandhi, 2001. "School Participation in Rural India," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 1-24, February.
    15. Nielsen, Helena Skyt, 1998. "Discrimination and detailed decomposition in a logit model," Economics Letters, Elsevier, vol. 61(1), pages 115-120, October.
    16. Datt, Gaurav & Ravallion, Martin, 1998. "Why Have Some Indian States Done Better Than Others at Reducing Rural Poverty?," Economica, London School of Economics and Political Science, vol. 65(257), pages 17-38, February.
    17. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 599-617.
    18. Abowd, John M & Killingsworth, Mark R, 1984. "Do Minority-White Unemployment Differences Really Exist?," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(1), pages 64-72, January.
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    Cited by:

    1. Katsushi Imai & Raghav Gaiha & Woojin Kang, 2011. "Poverty, inequality and ethnic minorities in Vietnam," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(3), pages 249-282.
    2. Raghav Gaiha & Ganesh Thapa & Katsushi Imai & Vani S. Kulkarni, 2007. "Endowments, discrimination and deprivation among ethnic groups," The School of Economics Discussion Paper Series 0722, Economics, The University of Manchester.

    More about this item


    poverty; caste; ethnicity; decomposition;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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