A Division of Laborers: Identity and Efficiency in India

68 Pages Posted: 15 Feb 2021 Last revised: 9 Apr 2022

See all articles by Guilhem Cassan

Guilhem Cassan

University of Namur

Daniel Keniston

Yale University; Yale University - Cowles Foundation; National Bureau of Economic Research (NBER); The International Growth Centre; Abdul Latif Jameel Poverty Action Lab (J-PAL)

Tatjana Kleineberg

World Bank

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Date Written: February 2021

Abstract

Workers’ social identity affects their occupation, and therefore the structure and prosperity of the aggregate economy. We estimate a general equilibrium Roy model of this phenomenon in the Indian caste system, where work and identity are particularly intertwined. New data on occupation, wages, and caste’s traditional occupations and social status show that workers are over-represented in their traditional occupations and under-represented in socially higher or lower occupations. We consider counterfactuals removing castes’ hierarchical and occupational links. Despite more efficient human capital allocation, aggregate output gains are small–in some counterfactuals negative–due to weaker caste networks and reduced learning across generations.

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Suggested Citation

Cassan, Guilhem and Keniston, Daniel and Kleineberg, Tatjana, A Division of Laborers: Identity and Efficiency in India (February 2021). NBER Working Paper No. w28462, Available at SSRN: https://ssrn.com/abstract=3785796

Guilhem Cassan (Contact Author)

University of Namur ( email )

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Daniel Keniston

Yale University ( email )

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Yale University - Cowles Foundation ( email )

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Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

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Tatjana Kleineberg

World Bank ( email )

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