Being from backward castes, classes and Muslims in India has an economic cost associated with the nature of institutional discrimination. Using the 2011–2012 National Sample Survey data, this study identifies that caste and religion still rule the modern Indian labour market. We find that discrimination is evident in the socio-religious earnings gaps. While the parametric decompositions suggest that most of these gaps are due to differential human capital endowment, the nonparametric method almost evenly attributes inequality to discrimination and endowment. The results presented in this study suggest that discrimination against Scheduled Castes and Scheduled Tribes, Muslims and Other Backward Classes should be included in policy designs to promote equity in the Indian labour market.
ArabsheibaniG., GuptaP., MishraT., & ParhiM. (2018). Wage differential between caste groups: Are younger and older cohorts different?Economic Modelling, 74, 10–23.
2.
AzamM. (2012). A distributional analysis of social group inequality in rural India. Journal of International Development, 24(4), 415–432.
3.
BasuK. (2001). On the goals of development. In MeierG. & StiglitzJ. (Eds.), Frontiers of development economics: The future in perspective (pp. 61–86). World Bank and Oxford University Press.
4.
BeckerG. S. (1957). 1971. The economics of discrimination. The University of Chicago Press.
5.
BhartiN. (2018). Wealth Inequality, Class and Caste in India, 1961–2012. (World (Working Paper No. 14). WID>.
6.
BhaumikS. K., & ChakrabartyM. (2009). Is education the panacea for economic deprivation of Muslims? Evidence from wage earners in India, 1987–2005. Journal of Asian Economics, 20(2), 137–149.
7.
BlinderA. S. (1973). Wage discrimination: reduced form and structural estimates. Journal of Human Resources, 8(4), 436–455.
8.
BorooahV. K. (2005). Caste, inequality, and poverty in India. Review of Development Economics, 9(3), 399–414.
9.
BorooahV. K., DiwakarD., MishraV. K., NaikA. K., & SabharwalN. S. (2014). Caste, inequality, and poverty in India: a re-assessment. Development Studies Research: An Open Access Journal, 1(1), 279–294.
10.
ChakrabortyS., BoharaA. K., BinderM., & SantosR. (2020). Is the Indian labor market biased against women? Yes! In JivettiB. and HoqueM. N. (Eds) Population change and public policy (Applied Demography Series, 11). Springer. https://doi.org/10.1007/978-3-030-57069-9_11
11.
CharlesK. K., & GuryanJ. (2008). Prejudice and wages: an empirical assessment of Becker’s The Economics of Discrimination. Journal of Political Economy, 116(5), 773–809.
12.
CottonJ. (1988). On the decomposition of wage differentials. Review of Economics and Statistics, 70(2), 236–243.
13.
DeiningerK., JinS., & NagarajanH. (2013). Wage discrimination in India’s informal labour markets: Exploring the impact of caste and gender. Review of Development Economics, 17(1), 130–147.
14.
DeshpandeA., & NewmanK. (2007). Where the path leads: The role of caste in post-university employment expectations. Economic and Political Weekly, 42(41), 4133–4140.
15.
FriedmanM., & KuznetsS. (1945). Income from independent professional practice (p. 352). National Bureau of Economic Research.
16.
GangI. N., SenK., & YunM. S. (2002). Caste, ethnicity and poverty in rural India. (Discussion Paper No. 629). IZA.
17.
GorausK., & TyrowiczJ. (2014). Gender wage gap in Poland: Can it be explained by differences in observable characteristics?Ekonomia, 36(1), 125–148.
18.
KarkiM., & BoharaA. K. (2014). Evidence of earnings inequality based on caste in Nepal. The Developing Economies, 52(3), 262–286.
19.
KijimaY. (2006). Caste and tribe inequality: evidence from India, 1983–1999. Economic Development and Cultural Change, 54(2), 369–404.
20.
KrishnanP. S. (2010). Understanding the backward classes of Muslim society. Economic and Political Weekly, 45(34), 46–56.
21.
KuznetsS. (1955). Economic growth and income inequality. American Economic Review, 45(1), 1–28.
22.
LeeJ., & WieD. (2017). Wage structure and gender earnings differentials in China and India. World Development, 97, 313–329.
23.
MadheswaranS., & AttewellP. (2007). Caste discrimination in the Indian urban labour market: Evidence from the National Sample Survey. Economic and Political Weekly, 42(41), 4146–4153.
24.
MadheswaranS., & SinghariS. (2016). Social exclusion and caste discrimination in public and private sectors in India: A decomposition analysis. The Indian Journal of Labour Economics, 59(2), 175–201.
25.
MincerJ. (1962). On-the-job training: Costs, returns, and some implications. Journal of Political Economy, 70(5, Part 2), 50–79.
26.
MincerJ. (1974). Schooling, experience, and earnings. Columbia University Press.
27.
MosseD. (2018). Caste and development: Contemporary perspectives on a structure of discrimination and advantage. World Development, 110, 422–436.
28.
MukherjeeD., & MajumderR. (2011). Occupational pattern, wage rates and earning disparities in India: A decomposition analysis. Indian Economic Review, 46(1), 131–152.
29.
National Sample Survey Office (NSSO). (2013). Employment and Unemployment Schedule- 68th Round (July 2011–June 2012) Data. http://www.mospi.gov.in
30.
NicodemoC., & RamosR. (2012). Wage differentials between native and immigrant women in Spain: Accounting for differences in support. International Journal of Manpower, 33(1), 118–136.
31.
ÑopoH. (2008). Matching as a tool to decompose wage gaps. Review of Economics and Statistics, 90(2), 290–299.
32.
OaxacaR. (1973). Male–female wage differentials in urban labour markets. International Economic Review, 14(3), 693–709.
33.
OaxacaR. L., & RansomM. R. (1994). On discrimination and the decomposition of wage differentials. Journal of Econometrics, 61(1), 5–21.
34.
Planning Commission. (2008). Eleventh Five-Year Plan, 2007–2012. Government of India. http://planningcommission.gov.in/index_oldpc.php
35.
Planning Commission. (2011). Faster, sustainable and more inclusive growth: An approach to the 12th Five-Year Plan. Government of India. http://planningcommission.gov.in/index_oldpc.php
36.
PsacharopoulosG., & ArriagadaA. M. (1986). The educational composition of the labour force: an international comparison. International Labour Review, 125(5), 561–574.
37.
RavallionM. (2014). Income inequality in the developing world. Science, 344(6186), 851–855.
38.
ThoratS., & AttewellP. (2007). The legacy of social exclusion: A correspondence study of job discrimination in India. Economic and Political Weekly, 42(41), 4141–4145.
39.
Van de WalleD., & GunewardenaD. (2001). Sources of ethnic inequality in Viet Nam. Journal of Development Economics, 65(1), 177–207.
