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Castes and Labor Mobility Zhou Guangwei Nanjing University October 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transcript of Castes and Labor Mobility - byelenin.github.io
Castes and Labor Mobility
Zhou Guangwei
Nanjing University
October 31, 2019
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Content
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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Introduction
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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Introduction
SC/STs
Scheduled Castes and Scheduled TribesHistorically economically backward, mostly very poorConcentrated in low-skill occupations and primarily ruralSystematic caste-based discrimination both economically and socially
Facing a social stratification along education, occupation and incomelines in modern India
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Introduction
Background
The constitution of IndiaAggregating castes into a schedule of the constitutionProviding affirmative action cover in both education and public sectoremploymentA key component of raising the social and economic mobility of theSC/STs to the levels of the non-SC/STs
No broad-based evaluation of the economic performance of SC/STssince the mid-1980s or for the post-independence period since 1947
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Introduction
Background
The existence of caste-based frictions in labor market allocations andsocial matching processesA key goal of the reservations policy
make it easier for the child of an illiterate SC or ST farm worker livingbelow the poverty line to get educated and find productive employmentin a better paying occupation
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Introduction
Questions
The questions this paper attempts to answerHow have the changes in India since the early 1980s affectedreservation policy goal?Has the rapid growth percolated down to the SC/STs in terms oftangible changes in their economic and social conditions?Is the primary reason for the economic deprivation of theseunderprivileged castes the types of occupations they tend to work in?Have the past three decades affected all sections of SC/STs the sameor some amongst them?
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Introduction
Some points of this paper
Examining the data for all states and for both rural and urban areasAnalyzing education, occupation, consumption, and wage outcomesjointlyProviding a time series perspective on the evolution of SC/STfortunes in India
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The Data
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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The Data
Dataset
The National Sample Survey (NSS) of IndiaUsing rounds 38(1983), 43(1987-1988), 50(1993-1994), 55(1999-2000)and 61(2004-2005)Coving the whole country except for a few remote and inaccessiblepocketsIncluding detailed information on over 120,000 households and 600,000individuals per round
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The Data
Sample
Age 16-65 belonging to male-headed households3-digit occupation code and education information is providedFull-time working individuals
working at least 2.5 days per weekNot currently enrolled in any education institution
Sample size: around 163,000-182,000 individuals
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The Data
One problem about sample selection
Focusing on full-time workerPrimarily motivated by our interest in wage and consumptionconvergence patterns across the caste groups
Comparing the non-SC/ST to SC/ST ratios in labor forceparticipa tion rates, overall employment rates, as well as full-time andpart-time employment rates
There was very little movement across the rounds in any of theseindicators
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The Data
One problem about sample selection
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The Data
One problem about sample selection
Focusing on full-time workerPrimarily motivated by our interest in wage and consumptionconvergence patterns across the caste groups
Comparing the non-SC/ST to SC/ST ratios in labor forceparticipa tion rates, overall employment rates, as well as full-time andpart-time employment rates
There was very little movement across the rounds in any of theseindicators
Conclusion: unlikely to contaminate the results
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The Data
Data on wages
Sample size: about 64,000 individuals per roundObtained as the daily wage/salaried income received for the workdone by respondents during the previous weekReal terms using state-level poverty lines that differ for rural andurban sectorsAll wages in 1983 rural Maharashtra poverty line
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The Data
Data on consumption expenditures
Data available at the household levelSample size: about 87,000 households per roundReal terms using official state poverty lines as the procedure for wageConverting consumption into per capita daily value terms
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The Data
Data on education
Raw data categoriesnot literateliterate but below primaryprimary educationmiddle educationsecondaryhigher secondarydiploma/certificate coursegraduate and abovepostgraduate and above
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The Data
Data on education
Converting into years of educationnot literate = 0 yearsliterate but below primary = 2 yearsprimary = 5 yearsmiddle = 8 yearssecondary and higher secondary = 10 yearsgraduate = 15 yearspostgraduate = 17 yearsdiplomas are treated similarly depending on the specifics of theattainment level
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The Data
Data on education
Five broader categoriesnot literateliter ate but below primaryprimarymiddlesecondary and above education
Coded as education categories 1, 2, 3, 4 and 5
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The Data
Summary statistics
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The Data
Summary statistics
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The Data
Summary statistics
Non-SC/STs are slightly older and are more likely to live in urbanareas than SC/STsThe household size of non-SC/ STs has remained larger than SC/SThouseholds, but the difference nar rowed significantly across thesample rounds
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Emprical Part
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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Emprical Part
Education attainment
In 1983, the education gap is 2.57 yearsIn 2004, the education gap is 1.74 yearsA clear trend toward convergence in education levels of SC/STstoward their non-SC/ST counterparts
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Emprical Part
Education attainment
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Emprical Part
Education attainment
Edu cation gaps decline as birthcohorts become youngerEducation gaps have declinedover time within the samebirth cohort
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Emprical Part
Education attainment
The years of education have been converging in both rural and urbanareas
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Emprical Part
Education attainment
SC/STs are systematically lesseducated than non-SC/STsIn category 1, SC/STs areoverrepresentedIn category 5, SC/STs areunderrepresented
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Emprical Part
Education attainment
A sustained decrease over timein the share of illiteratesamongst both groupsBetween 1983 and 2004-2005,the proportion of illiterate
SC/STs fell from 65 percentto 37 percentnon-SC/STs fell from justunder 42 percent to 24percent
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Emprical Part
Education attainment
The largest increases for SC/STs occurred in categories 4and 5The largest increases fornon-SC/ STs occurred incategory 5
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Emprical Part
Education attainment
A convergent trend for the twogroupsThe sharpest convergence hasbeen in category 5The absolute differencebetween the two groups stillremains very high
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Emprical Part
Education attainment
Using ordered probit regressions to test the significance ofconvergence
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Emprical Part
Education attainment
SC/STs are more likely to be illiterate, and less likely to be in thehigher education categories relative to non-SC/STsA significant trend toward convergence in educa tion attainments ofthe two groups in every category except secondary education
the probability of second ary school education has declined over thesample period; not all sections of SC/STs may have benefited equallyduring this period
The marginal effects of the SC/ST dummy have declined in absolutevalue in categories 1 to 4The relative probability gap has declined while the absolute gap haswidened in the top education category
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Emprical Part
Occupation Choices
Adjustment on the raw occupation dataAggregate the 3-digit occupation codes into a one-digit codeGroup by combining occupations with similar skill requirementsOcc 1 comprises white collar administrators, executives, managers,professionals, technical and clerical workers; Occ 2 collects blue collarworkers such as sales workers, service workers and production workers;Occ 3 collects farmers, fishermen, loggers, hunters, etc.
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Emprical Part
Occupation Choices
Some basic factsIndividuals in Occ1 are on average the most educated, followed byOcc2 and Occ3Occ1 is characterized by the highest mean wage, followed by Occ 2 andOcc 3
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Emprical Part
Occupation Choices
A systematic decline in Occ 3between 1983 and 2004-2005The largest expansion in theemployment share of bothgroups has been in Occ 2A gradual decline in theagricultural sector and anexpansion in services
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Emprical Part
Occupation Choices
The trends in occupation shares of the two groups imply that theoverall occupation distributions have been converging
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Emprical Part
Occupation Choices
Evaluation of the statistical significance of the convergent trendsEstimate a multinomial probit model of occupation
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Emprical Part
Occupation Choices
SC/STs were less likely to be employed in Occ 1 and Occ 2, and morelikely to work in Occ 3 as compared to non-SC/STsThe negative SC/ST effect on the probability of being employed inOcc 2 and the positive SC/ST effect on the probability of Occ 3employment have both declined significantly over timeA small but statistically significant increase in the negative effect ofthe SC/ST dummy on the probability of being employed in Occ1
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Emprical Part
Wages and consumption
Economic rewards of education and occupation choicesWagesConsumption
Problems of two measuresThe wage data in the NSS is only available for the non-self-employedindividualsThe accuracy of the reported wages in sample sur veysThe consumption expenditure data is available only at the householdlevel
Examining both provides an auto matic check of robustness of theresults
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Emprical Part
Wages
Wage distribution of bothgroups has shifted sharply tothe right over timeDue to the rapid take off ofthe Indian economy
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Emprical Part
Wages
The density functions of thetwo groups have come muchcloser together over timeConvergence in the twodistribu tions for all except theeightieth to ninety-fifthpercentiles
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Emprical Part
Wages
The difference in wages of thetwo groups is smaller for lowerpercentilesHigher percentile non-SC/STsmust earn greater wagemark-up relative to their lowerpercentile coun terpartsWage distribution ofnon-SC/STs is more unequalthan that of SC/STs
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Emprical Part
Wages
Examining the wage gapEstimate simple regressions of log wages on a constant and an SC/STdummy variableControl flexibly for age by including individual age and age squaredtermsAssess the effect of caste on the mean and unconditional quantiles ofwagesuse the RIF method to determine the effect of covariates on theunconditional quantiles
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Emprical Part
Wages
The coefficient on the SC/STdummy variable is negativeand significant throughoutWage gaps are the lowest atthe bottom end of thedistribution, and the highest atthe top end
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Emprical Part
Wages
Wage gaps have declined overtime along the entiredistribution except the verytop endThe sharpest decline occurredat the median of thedistributionA significant convergence inwages across castes during1983-2005 period
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Emprical Part
Wages
USA VS. IndiaUSA
Between 1980 and 2006, the median wage of black males relative towhite male workers has remained relatively stable around 75 percentDuring the same period, the median wage of Hispanic men relative towhite men declined from 71 percent to under 60 percent
IndiaThe median wage of SC/STs relative to non-SC/STs has increasedsecularly from 64 percent in 1983 to 79 percent in 2004-2005
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Emprical Part
Some questions and methods
QuestionsHave wages been converging due to conver gence in the determinants ofwages such as education, or have they been converging due to changesin unmeasured factors such as discrimination?How much of the wage convergence can be accounted for by education?
MethodsApply DFL method to decom pose the overall difference in the observedwage distributionsUse a Oaxaca-Blinder decomposition of changes in the wage gap overtime
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Emprical Part
Wages
Evaluate the contribution of different attributes to the wage gapEvaluate the role of demographic characteristicsAdd educa tion to the set of characteristicsIntroduce state-level SC/ST res ervation quotas
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Emprical Part
Wages
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Emprical Part
Wages
Attributes can account for almost all of the wage gap between thegroups
demographic characteristics do explain a substantial portion of theSC/ST wage gap especially in 2004-2005difference in education attainments explains the majority of theobserved differencereservation quotas plays a negli gible role
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Emprical Part
One more question
QuestionWhat factors account for the changes in the wage gap between 1983and 2004-05?
MethodUse the Oaxaca-Blinder method to decompose the observed changes inthe mean and quantile wage gapsOLS regressions for the decomposition at the meanRIF regressions for decompositions at the tenth, fiftieth, and ninetiethquantilesAdd a Muslim dummy
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Emprical Part
Wages
The mean wage gap has declined except at the very top end of wagedistribution, and almost all of it is accounted for by changes inmeasured characteristics, in particular education
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Emprical Part
Wages
Changes in education and reservation quota have accounted for about40 percent of the change in the explained gap at the tenth quantilesand for about 30 percent at the mean and fiftieth quantileFor the ninetieth quantile, mostly due to changes in the group-specificstructure of wages
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Emprical Part
Wages
The caste wage gap is mostly explained by differences incharacteristics of the two social groups with education having playeda large role in driving the conver gence in wages during the 1983-2005period
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Emprical Part
Consumption
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Emprical Part
Consumption
Panel A shows the distribution of consumption for the two groups for1983 and 2004–2005Panel B reveals that the consumption gap between non-SC/STs andSC/STs has declined over time for all percentiles below the eightiethpercentileA more unequal distribution of non-SC/ST consumption in com parison with SC/ST consumption in the later yearsThese patterns broadly mirror the patterns we found in the wage data
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Emprical Part
Consumption Gap and changes
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Emprical Part
Consumption Gap and changes
The results mirror the convergence results for wagesThe SC/ST dummy is significant and negative across all the roundsThe SC/ST consumption gap is of similar magnitude along the entiredistributionThe estimated value of the SC/ST dummy coefficient has declined overtime for the entire distribution except for the very topThe con sumption gap has narrowed by almost 8 percent for the bottomquantiles and about 4 percent at the median
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Emprical Part
Consumption
Do SC/ST households have lower consumption levels after one controls forhousehold characteristics?
Use the DFL decompositionExamine the influence of individual covariates by introducing themsequentially
first consider demographic characteristicsadd education attainmentsinclude state-level reservation quotas
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Emprical Part
Consumption
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Emprical Part
Consumption
Demographic characteristics do not contribute much to the observedconsumption gapsThe explained component becomes much more important wheneducation is addedIn 2004-2005 the contribution of the demographic characteristics andeducation matters at the top end of the consumption distributionReservation quotas do not contribute much to the consumption gapsThe consumption gaps have a larger unexplained component thanwages
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Emprical Part
Consumption
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Emprical Part
Consumption
The mean, median and tenth quantile of consump tion gap have alldeclined significantlyGap has widened somewhat at the top of the consumption distributionEducation attainments have accounted for a large fraction of thedecline in the measured gapsAt the ninetieth quantile, most of the change in the explained gapbetween 1983 and 2004-2005 is due to changes in individual attributesFor the lower end of the distribution however, intertemporal changesin the return differen tials contributed the most to the change in theexplained gap
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Emprical Part
Consumption
Both consumption and wages of SC/STs have been convergingtoward the levels of non-SC/STs at every point of their respectivedistributions, except at the very topMost of the convergence in wages is accounted for by changes in themeasured attributes of SC/STs relative to non-SC/STsFor consumption it is a combination of convergence in attributes andunobservable caste-based factors
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Emprical Part
Gender Differences
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Emprical Part
Gender Differences
The education gaps were larger for women throughout but becamesmaller over timeThe labor force participation rates of SC/ST women were consistentlylarger than the participation rates of non-SC/ST women, but this gapbecame smaller over timeThe caste wage gap was smaller throughout for women relative to thegap for men
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Conclusion
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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Conclusion
Conclusion
A period of dramatic changes for these historically disadvantagedgroups
SC/STs have systematically and significantly reduced the gap with non SC/STs in their average education attainment levels and in theirrelative representa tions in different occupationsThe median wage and consumption gaps between SC/STs andnon-SC/STs have narrowed sharply during this periodThe convergence in occupation and wages is mostly due to aconvergence in attributes, especially education
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Conclusion
Conclusion
The convergence patterns have not been uniformFor both wages and consumption, the convergence is much sharper forthe lower per centile groupsIn education, there has been caste convergence in the relatively lowereducation categories but a slight increase in the gaps for the highesteducation categories.For occupation choices, there has been convergence in representationsof the two groups in blue collar occupations but a divergence in theirrepresentations in white collar occupations
These results suggest that intergenerational mobility rates of SC/STsmay have risen faster than non-SC/STs between 1983 and 2005.
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Remark
1 Introduction
2 The Data
3 Emprical Part
4 Conclusion
5 Remark
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Remark
Remark
Detailed test of hypotheseLots of methodsSome problems
Data problemSome controverial resultsetc.
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