What is the relation between caste, gender and school choice in a globalized economy? This paper is an interesting effort to understand and answer this question. It addresses the question of how traditional institutions interact with the forces of globalization to shape the economic mobility and welfare of particular groups of individuals in the new economy. The authors explore the role of the caste system—in shaping career choices by gender in Bombay using new survey data on school enrollment and income over the past 20 years.

They find that male working-class—lower-caste—networks continue to channel boys into local language schools that lead to the traditional occupation, despite the fact that returns to nontraditional white-collar occupations rose substantially in the 1990s, suggesting the possibility of a dynamic inefficiency. In contrast, lower-caste girls, who historically had low labor market participation rates and so did not benefit from the network, are taking full advantage of the opportunities that became available in the new economy by switching rapidly to English schools.

Munshi K & Rosenzweig M (2006), Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy, American Economic Review, 96(4):1225-1252.

This paper by Kaivan Munshi & Mark Rosenzweig proposes a novel explanation for the emergence and persistence of parochial politics, based on the idea that strong social institutions can discipline the leaders they put forward, successfully substituting for secular political institutions when they are ineffective. Using unique data on Indian local governments at the ward level over multiple terms, and exploiting the randomized election reservation system, they find that the presence of a numerically dominant sub-caste (caste equilibrium) is associated with the selection of leaders with superior observed characteristics and by greater public goods provision. This improvement in leadership competence occurs without apparently diminishing leaders’ responsiveness to their constituency.

Does caste discrimination express itself in terms of difference in salaries and wages in urban India? I am afraid the answer is a qualified yes; qualification being it seems to depend on the level of aggregation we are addressing the issue. There seems to be some evidence for discrmination in the overall urban sector but little or no evidence in software and call industry in particular.

Madheswaran and Attewell use National Sample Survey (NSS) data and find that employees from SC/STs in urban salaried jobs in 1999-2000 received wages that were about 30 per cent lower on average than those of other castes. About 15 per cent of this differential could not be explained by the measures of education and work experience available in the NSS data. Of course, how much of this unexplained differential acutally can serve as an evidence of discrimination will depend on how finer the measures of education and work experience are in the NSS data.

In yet another paper Banerjee and his coauthors find less dicrimination in the call center industry and no discrimination in the software industry. So now the interesting question is why does discrimination persisit in some industries and not in others. It would be intersting to see a model where employers choose to discrminate in equilibrium conditional on some factors.

Banerjee, A, M Bertrand, S Dutta and S Mullainathan(2007): ‘Caste and Religion in India’s ‘New Economy’:Evidence from a Field Experiment on Labour Market Discrimination in Delhi’, Mimeo.

S Madheswaran & Paul Attewell (2007), Caste Discrimination in the Indian Urban Labour Market: Evidence from the National Sample Survey, Economic and Political Weekly, VOL 42 No. 41 October 13 – October 19.