Caste equality: Income disparity persists despite education, social capital

Inequality in an economy is often a product of differences in what individuals have inherited.  The obvious inheritance item relevant for explaining inequality is wealth.  However, the inheritance of social status can also be a source of inequality if it becomes a dimension of relevance in the economic order.

In India, the social impact of caste status on an individual’s economic prospects is well-recognised, and reflected in affirmative actions for Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC), collectively referred to as lower castes.   However, some argue that we should focus on poorer individuals in those eligible for affirmative action and even extend affirmative action to individuals who are poor but do not belong to a lower caste.  But there are also others who advocate for a caste census with the aim of assessing the adequacy of affirmative action and strengthening it.

The central issue in deciding between these two divergent approaches is to assess with data whether, all other things being equal, a lower caste person has a lower income or poorer access to economic opportunities than the average.

Two recent studies based on the panel data from Indian Human Development Survey indicate rather clearly that caste plays an important role in determining income level. The first study regresses income on a variety of determining factors and finds that the annual income of lower-caste individuals is 21.1 per cent lower than that of the rest of the population.  On a more disaggregated basis, the model shows that Adivasis’ income is, on average, 28.7 per cent lower than that of upper caste groups, while the income of Dalits, Muslims, and OBCs, are 27.74 per cent, 20.17 per cent, and 19 per cent lower, respectively.

There are two factors that reduce the relative disparity — higher education and residence in a higher-income state. The study shows that lower-caste individuals with higher education have a significantly lower disparity, which is 10.3 per cent relative to the upper caste. The reduction is even more substantial for Adivasis. As for the state-specific effect, the study shows that for every Rs 10,000 increase in the real gross domestic product (GDP) per capita at the state level, there is, on average, a 9.05 percentage points reduction in caste-based income disparity for Adivasis. For Dalits, OBCs, and Muslims, the reductions are 7.6, 4.9, and 1.8 percentage points, respectively. Note, however, that the difference, though reduced, is not eliminated.

Another study, based on the same survey data, focuses on the differences experienced by lower and upper caste groups who are business owners. The study finds that Dalit business owners have a lower income compared to those who do not face the stigma of exclusion but who do face socio-economic disadvantage, namely, OBCs, Adivasis, and Muslims. The study takes into account what it describes as social capital, which is defined in terms of the extent of inter-personal contact that the individual has with other professionals, particularly from other castes. It finds that even when the social capital of the Dalit individual is higher, the income gap persists, indicating that caste stigma continues to play a role. This study also finds that education improves the incomes of Dalits to a similar degree as it improves the incomes of non-Dalits.

Even though the studies have come out this year, the survey data used by them is more than a decade old. The first study, using the survey results for 2005 and 2012, reports that the discrepancy between upper castes and lower castes was reduced but not eliminated. Can we assume that, due to income growth, this difference has further diminished? Perhaps, but it is unlikely to be eliminated altogether. On a more personal note, I would say that my interactions with Dalits and Adivasis who have reached the top suggests that they are a cut above the normal, which is why they overcame discrimination.

The children of parents who are casual workers are at a particular disadvantage. I have observed that children of construction workers, who reside temporarily at the construction site, often lack access to education and are fated to continue as casual workers in their adulthood. Here, too, there is a difference between Dalits and Adivasis and the other castes.  According to a Azim Premji University report for non-SC/ST castes, casual work fell from 83 per cent in 2004 to 53 per cent by 2018, with a corresponding increase in better-quality work such as regular salaried jobs. While casual work also fell for SC/ST castes, the decline was less pronounced, from 86 per cent to 76 per cent.

Hence, the starting point for strengthening affirmative action must be the proven premise that a lower caste person, even if as well qualified as an upper-caste individual, will still face a significant income difference.  One must also accept the premise that Dalits who are business owners are at a disadvantage to the non-Dalit owners.

The impact of higher education in reducing income disparity indicated by the studies cited suggests that affirmative action should be strengthened by ensuring access to good quality higher education to Dalits and Adivasis.  This can be done even without changing the sentiments of upper caste persons.

The real change required is a reduction in inter-caste separation. The dominant factor here is the belief in within-caste endogamy, which still prevails widely not just among the four varnas, but also among the 4,000 castes within these varnas, leading to a significant degree of social separation. A 2005 poll indicated that only 6 per cent of marriages were inter-caste. Promoting inter-caste marriages can help erode inherited social inequalities, and this is recognised in the official Dr Ambedkar Scheme for Social Integration through Inter-Caste Marriages, which offers Rs 2.5 lakh for marriages between SC and non-SC individuals. Launched in 2013-14, the scheme had an average of 17,000 beneficiaries over five years, but none from Bihar and Uttar Pradesh.

There are some elements of caste discrimination that have been reduced with the political campaign against untouchability that started more than a century ago and the constitutional provision that abolished it. Urbanisation and the gradual erosion of occupational limitations have also diluted the rigour of the traditional caste system. But the long-term answer is the de facto elimination of caste separation, as argued by  Dr Ambedkar when he said: “ In my opinion, it is only when Hindu society becomes a casteless society that it can hope to have strength enough to defend itself”  in his famous tract The Annihilation of Caste, which is a speech that he was not allowed to deliver!

To put it simply, caste equality can be promoted only by making caste a minor part of inheritance in a society where more and more families are inter-caste connected.

desaind@icloud.com