Graded Caste Inequality and Poverty: Evidence on Role of Economic Discrimination

Abstract

Graded caste inequality is the most stubborn feature of the ancient caste system which continues with some of its worst features even today. In view of this context, this paper looks at the persistence of graded caste inequality and the role of economic discrimination, drawing mainly from the recent empirical and theoretical research. It examines the following three interrelated aspects of the graded caste inequality (a) Nature of (graded) inequality in income and poverty, and other indicators of human development like malnutrition and education, particularly among three castes: former untouchables (SCs), OBC and higher castes (HCs); (b) Empirical evidence from recent studies on market and non-market discrimination faced by the SC; and (c) Impact of discrimination on income and poverty of SCs, OBCs and HCs in a graded manner. We find that much of the inequality in per capita consumption expenditure is due to inequality in asset ownership (agricultural land and enterprise) and higher education. Most of the explained difference is due to higher education/regular salaried jobs and asset ownership in the form of land and enterprises. In the urban salaried labour market, the contribution of discrimination to wage differential between SCs and HCs is 28.5 per cent in the regular labour market, 19.4 and 31.7 per cent for public and private sectors, respectively. We also find that in the regular labour market, the extent of caste-based wage gap as well as discrimination varies significantly across the quintiles of the wage distribution. The wage gap between SCs and HCs that is attributable to discrimination is higher in top quintiles than at bottom quintiles of wage distribution. We also find that discrimination against SCs and OBCs partially operates through occupational segregation.