Abstract

India experienced sustained economic growth for more than two decades following the economic liberalization in 1991. While economic growth reduced poverty significantly, it was also associated with an increase in inequality. Does this increase in inequality reflect deep-seated inequality of opportunity or efficient incentive structure in a market oriented economy? This paper provides evidence on economic mobility in post-reform India by focusing on educational attainment of children. We use two related measures of immobility: sibling and intergenerational correlations. We analyze the trends in and patterns of educational mobility from 1992/93 to 2006, with a special emphasis on the roles played by gender and geography. The evidence shows that family background plays a strong role; the estimated sibling correlation in India in 2006 is higher than the available estimates for Latin American countries. There is a persistent gender gap in rural and less-developed areas. The only group that experienced substantial improvements is women in urban and developed areas. Men experienced little or no upward mobility. Almost 70 percent of the variance in children’s education can be accounted for by parental education and geographic location. We provide possible explanations for the apparently puzzling improvements for urban women in a country with strong son preference.

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