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

34 Pages Posted: 13 Mar 2006

See all articles by Sumon K. Bhaumik

Sumon K. Bhaumik

Aston University - Aston Business School; Institute for the Study of Labor (IZA); University of Michigan at Ann Arbor - Stephen M. Ross School of Business, William Davidson Institute

Manisha Chakrabarty

Indian Institute of Management Calcutta

Multiple version iconThere are 2 versions of this paper

Date Written: March 2006

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 intercaste 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 1987-1999 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.

Keywords: inequality, caste, religion, India

JEL Classification: O15, O17

Suggested Citation

Bhaumik, Sumon K. and Chakrabarty, Manisha, Earnings Inequality in India: Has the Rise of Caste and Religion-Based Politics in India Had an Impact? (March 2006). IZA Discussion Paper No. 2008. Available at SSRN: https://ssrn.com/abstract=890287

Sumon K. Bhaumik (Contact Author)

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, West Midlands B47ET
United Kingdom

Institute for the Study of Labor (IZA) ( email )

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

University of Michigan at Ann Arbor - Stephen M. Ross School of Business, William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Manisha Chakrabarty

Indian Institute of Management Calcutta ( email )

Joka
D.H Road
Kolkata, West Bengal 700104
India

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