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

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 1987-99 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 interreligion earnings differences to a great extent.http://deepblue.lib.umich.edu/bitstream/2027.42/57199/1/wp819 .pd

The Representative Agent Hypothesis: An Empirical Test

This paper empirically tests the validity of using only mean income as a representative variable for the whole population in the aggregate consumption relation and of assuming time-invariance of the coefficients in this relation, as done in macromodels. We use a statistical distributional approach of aggregation to test these properties on the UK-Family Expenditure Survey [1974-1993]. It is observed that the time-invariance assumption is rejected in most cases. A bootstrap test also suggests that in addition to mean income, the dispersion of income matters significantly for the commodity group services in several years and for clothing & footwear and total nondurable in some years, thus invalidating the representative agent hypothesis.Representative Agent Hypothesis, Time Invariance, Heterogeneity

The Representative Agent Hypothesis: An Empirical Test

This paper empirically tests the validity of using only /mean /income as a representative variable in the aggregate consumption relation and of assuming time-invariance of the coefficients in this relation, as done in macromodels. We use a statistical distributional approach of aggregation to test these properties on the UK-Family Expenditure Survey [1974-1993]. The time-invariance assumption is rejected in most cases. A bootstrap test also suggests that in addition to mean income, the /dispersion /of income matters significantly for the commodity group /services /in several years and for /total/ /nondurable/ in some years, thus invalidating the /representative agent hypothesis/.representative agent hypothesis, time invariance, heterogeneity

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

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 1987-99 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 interreligion earnings differences to a great extent.Inequality, Caste, Religion, India

Mother or Motherland: Can a Government Have an Impact on Educational Attainment of the Population? Preliminary Evidence from India

In this paper, using data from the 61st round of the (Indian) National Sample Survey, we examine the relative impacts of personal-household and state-level characteristics (including government policy) on the likelihood of transition from one educational level to the next. Our analysis suggests that the most important factors driving these transition likelihoods are personal and household characteristics like gender and education of household heads. However, state-level characteristics and government policies have a significant impact on these transition likelihoods as well, especially for transitions from the lowest levels of education to somewhat higher levels. The odds of making the transition to higher education, especially tertiary education, are systematically lower for women than for men, for individuals in rural areas than those in urban areas, and for Muslims than for Hindus. An important conclusion of our analysis is that there is significant scope for government policy to address educational gaps between various demographic and other groups in the country.educational attainment, likelihood of transition, government policy

Empirical Regularities in Distributions of Individual Consumption Expenditure

We empirically investigate distributions of individual consumption expenditure f or four commodity categories conditional on fixed income levels. The data stems from the Family Expenditure Survey carried out annually in the United Kingdom. W e use graphical techniques to test for normality and lognormality of these distributions. While mainstream economic theory does not predict any structure for these distributions, we find that in at least three commodity categories individual consumption expenditure conditional on a fixed income level is lognormally distributed.Comment: 9 pages including figures; for Int. J. Mod. Phys. C 13, No.

Is Education the Panacea for Economic Deprivation of Muslims? Evidence from Wage Earners in India, 1987-2004

Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies like the one in India. We address this lacuna in the literature by examining the differences in the average (log) earnings of Hindu and Muslim wage earners in India, during the 1987-2004 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average (log) earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average (log) earnings. Citing other evidence about persistence of educational achievements across generations, however, we argue that attempts to narrow this gap using quotas for Muslim households at educational institutions might be counterproductive from the point of view of conflict avoidance.earnings gap, education, decomposition, religion

Is Education the Panacea for Economic Deprivation of Muslims? Evidence from Wage Earners in India, 1987-2004

Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies likethe one in India. We address this lacuna in the literature by examining the differences in the average (log) earnings of Hindu and Muslim wage earners in India, during the 1987-2005 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average (log) earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average (log) earnings. Citing other evidence about persistence of educational achievements across generations, however, we argue that attempts to narrow this gap using quotas for Muslim households at educational institutions might be counterproductive from the point of view of conflict avoidance.

Mother or motherland: Can a government have an impact on educational attainment of the population? Preliminary evidence from India

In this paper, using data from the 61st round of the (Indian) National Sample Survey, we examine the relative impacts of personal-household and state-level characteristics (including government policy) on the likelihood of transition from one educational level to the next. Our analysis suggests that the most important factors driving these transition likelihoods are personal and household characteristics like gender and education of household heads. However, state-level characteristics and government policies have a significant impact on these transition likelihoods as well, especially for transitions from the lowest levels of education to somewhat higher levels. The odds of making the transition to higher education, especially tertiary education, are systematically lower for women than for men, for individuals in rural areas than those in urban areas, and for Muslims than for Hindus. An important conclusion of our analysis is that there is significant scope for government policy to address educational gaps between various demographic and other groups in the country.educational attainment, likelihood of transition, government policy

Whither Human Capital? The Woeful Tale of Transition to Tertiary Education in India

In this paper we examine the issue of high dropout rates in India which has adverse implications for human capital formation, and hence for the country’s long term growth potential. Using the 2004-05 National Sample Survey employment-unemployment survey data, we estimate transition probabilities of moving from a number of different educational levels to higher educational levels using a sequential logit model. Our results suggest that the overall probability of reaching tertiary education is very low. Further, even by the woeful overall standards, women are significantly worse-off, particularly in rural areas.http://deepblue.lib.umich.edu/bitstream/2027.42/133034/1/wp1019.pd