1 Introduction
2 Review of related literature
3 Methodology
3.1 Blinder–Oaxaca decomposition framework
3.2 Quantile regression decomposition framework
4 Data and descriptive statistics
4.1 Data
4.2 Descriptive statistics
Variable | All enterprises | SCST enterprises | Non-SCST enterprises |
---|---|---|---|
Outcome variables | |||
Gross receipts (Rs.) | 108,015.8 (258,019) | 58,804.02 (98,524.46) | 118,708.7 (279,809.3) |
Net income (Rs.) | 41,726.15 (45,158.62) | 25,640.14 (32,726.04) | 45,218.44 (46,704.93) |
Explanatory variables | |||
Individual characteristics | |||
Age (in years) | 39.13 (12.43) | 38.6 (12.53) | 39.25 (12.4) |
Married | 0.86 (0.34) | 0.86 (0.34) | 0.86 (0.34) |
Years of education | 7.79 (4.64) | 5.66 (4.57) | 8.25 (4.53) |
Household characteristics | |||
SCST | 17.84 (0.38) | ||
Urban location | 0.49 (0.5) | 0.33 (0.47) | 0.53 (0.5) |
Membership in | |||
Business group | 0.08 (0.28) | 0.06 (0.23) | 0.09 (0.29) |
Credit or savings group | 0.07 (0.26) | 0.07 (0.26) | 0.07 (0.26) |
Caste association | 0.14 (0.35) | 0.13 (0.33) | 0.15 (0.35) |
Development group | 0.02 (0.14) | 0.01 (0.1) | 0.02 (0.15) |
Co-operative | 0.03 (0.18) | 0.02 (0.15) | 0.04 (0.19) |
Village panchayat or ward committee | 0.11 (0.31) | 0.13 (0.33) | 0.11 (0.31) |
Business characteristics | |||
Number of family workers | 1.39 (0.7) | 1.48 (0.8) | 1.37 (0.67) |
Number of hours | 2585.73 (1614.59) | 2065.16 (1480.38) | 2698.74 (1620.45) |
Workplace: home-based | 0.25 (0.43) | 0.26 (0.44) | 0.25 (0.43) |
Workplace: other fixed | 0.52 (0.5) | 0.4 (0.49) | 0.55 (0.5) |
Workplace: moving | 0.23 (0.42) | 0.35 (0.48) | 0.2 (0.4) |
5 Results
5.1 Earnings function estimates
Dependent variable: log income | Specification 1 | Specification 2 | ||||
---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | |
Pooled | SCST | Non-SCST | Pooled | SCST | Non-SCST | |
SCST | −0.349*** (0.056) | −0.103*** (0.039) | ||||
Age | 0.017** (0.008) | 0.039** (0.016) | 0.016* (0.009) | 0.022*** (0.007) | 0.039** (0.016) | 0.019** (0.008) |
Age squared/100 | −0.017* (0.009) | −0.038** (0.018) | −0.016* (0.010) | −0.024*** (0.008) | −0.043** (0.018) | −0.021** (0.009) |
Married | 0.141** (0.056) | −0.078 (0.109) | 0.185*** (0.059) | 0.060 (0.051) | −0.053 (0.129) | 0.091* (0.048) |
Years of education | 0.055*** (0.004) | 0.065*** (0.010) | 0.052*** (0.004) | 0.012*** (0.004) | 0.011 (0.008) | 0.013*** (0.004) |
Asset ownership | 0.150*** (0.009) | 0.138*** (0.027) | 0.151*** (0.009) | |||
Urban location | 0.721*** (0.049) | 0.768*** (0.090) | 0.707*** (0.051) | 0.250*** (0.036) | 0.261*** (0.076) | 0.252*** (0.039) |
Business or professional group membership | 0.158** (0.063) | 0.195 (0.127) | 0.160** (0.070) | |||
Credit or savings group membership | −0.120** (0.048) | −0.124 (0.101) | −0.127** (0.057) | |||
Caste association membership | −0.049 (0.060) | −0.075 (0.085) | −0.054 (0.072) | |||
Development group/NGO membership | 0.067 (0.080) | 0.535* (0.295) | 0.060 (0.082) | |||
Co-operative membership | −0.096 (0.096) | −0.236 (0.236) | −0.095 (0.102) | |||
Village panchayat or ward committee | −0.048 (0.064) | −0.042 (0.067) | −0.050 (0.081) | |||
Log (number of hours) | 0.552*** (0.029) | 0.592*** (0.054) | 0.530*** (0.031) | |||
Number of workers | −0.043* (0.026) | −0.077 (0.051) | −0.026 (0.028) | |||
Workplace-other fixed | 0.267*** (0.049) | 0.262*** (0.078) | 0.273*** (0.055) | |||
Workplace-moving | 0.159*** (0.055) | 0.085 (0.087) | 0.178*** (0.061) | |||
Constant | 9.500*** (0.272) | 9.975*** (0.340) | 9.413*** (0.303) | 5.280*** (0.280) | 5.123*** (0.505) | 5.507*** (0.319) |
Observations | 7271 | 1298 | 5973 | 7035 | 1252 | 5783 |
R
2
| 0.304 | 0.378 | 0.252 | 0.514 | 0.653 | 0.454 |
5.2 Decomposition of the mean earnings gap
Panel A Spec. 1 | Panel B Spec. 2 | |||||
---|---|---|---|---|---|---|
Pooled coefficients | Non-SCST coefficients | SCST coefficients | Pooled coefficients | Non-SCST coefficients | SCST coefficients | |
Difference | 0.667*** (0.075) | 0.667*** (0.075) | 0.667*** (0.075) | 0.641*** (0.077) | 0.641*** (0.077) | 0.641*** (0.077) |
Explained | 0.318*** (0.046) | 0.297*** (0.044) | 0.389*** (0.062) | 0.538*** (0.067) | 0.519*** (0.065) | 0.577*** (0.075) |
Unexplained | 0.349*** (0.054) | 0.369*** (0.058) | 0.278*** (0.054) | 0.103*** (0.038) | 0.122*** (0.041) | 0.064 (0.045) |
% Unexplained | 52.31 | 55.42 | 41.7 | 16.06 | 19.01 | 10.05 |
Contribution to explained component
| ||||||
Years of education | 0.129*** (0.016) | 0.124*** (0.016) | 0.152*** (0.028) | 0.028*** (0.009) | 0.03*** (0.01) | 0.025 (0.017) |
Urban location | 0.134*** (0.022) | 0.132*** (0.022) | 0.143*** (0.027) | 0.045*** (0.009) | 0.045*** (0.01) | 0.047*** (0.015) |
Asset ownership | 0.205*** (0.021) | 0.207*** (0.021) | 0.189*** (0.039) | |||
Total person-hours | 0.215*** (0.037) | 0.207*** (0.036) | 0.231*** (0.044) |
5.3 Quantile regressions
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Mean | Q10 | Q25 | Q50 | Q75 | Q90 | |
SCST | −0.349*** (0.056) | −0.532*** (0.073) | −0.467*** (0.051) | −0.368*** (0.031) | −0.275*** (0.039) | −0.266*** (0.038) |
Age | 0.017** (0.008) | 0.044*** (0.012) | 0.038*** (0.007) | 0.033*** (0.012) | 0.024*** (0.007) | 0.022*** (0.008) |
Age squared/100 | −0.017* (0.009) | −0.049*** (0.014) | −0.044*** (0.008) | −0.036*** (0.011) | −0.022*** (0.007) | −0.019** (0.008) |
Married | 0.141** (0.056) | 0.132 (0.085) | 0.149*** (0.046) | 0.110 (0.160) | 0.080 (0.053) | 0.053 (0.053) |
Years of education | 0.055*** (0.004) | 0.052*** (0.005) | 0.054*** (0.004) | 0.054*** (0.010) | 0.059*** (0.003) | 0.063*** (0.004) |
Urban location | 0.721*** (0.049) | 0.936*** (0.059) | 0.743*** (0.037) | 0.599*** (0.051) | 0.535*** (0.029) | 0.491*** (0.030) |
Constant | 9.500*** (0.272) | 7.822*** (0.218) | 8.680*** (0.266) | 9.503*** (0.179) | 10.238*** (0.180) | 10.927*** (0.207) |
Observations | 7271 | 7271 | 7271 | 7271 | 7271 | 7271 |
R
2
| 0.304 |
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Mean | Q10 | Q25 | Q50 | Q75 | Q90 | |
SCST | −0.103*** (0.039) | −0.104** (0.050) | −0.115*** (0.038) | −0.161*** (0.033) | −0.103*** (0.030) | −0.141*** (0.035) |
Age | 0.022*** (0.007) | 0.052*** (0.010) | 0.044*** (0.008) | 0.021*** (0.006) | 0.017*** (0.005) | 0.009 (0.007) |
Age squared/100 | −0.024*** (0.008) | −0.060*** (0.011) | −0.050*** (0.010) | −0.024*** (0.006) | −0.019*** (0.006) | −0.010 (0.007) |
Married | 0.060 (0.051) | 0.172*** (0.055) | 0.091* (0.053) | 0.105** (0.043) | 0.078* (0.042) | 0.091* (0.050) |
Years of education | 0.012*** (0.004) | 0.018*** (0.005) | 0.011*** (0.003) | 0.012*** (0.003) | 0.016*** (0.003) | 0.017*** (0.004) |
Asset ownership | 0.150*** (0.009) | 0.118*** (0.011) | 0.136*** (0.009) | 0.150*** (0.006) | 0.170*** (0.006) | 0.169*** (0.009) |
Urban location | 0.250*** (0.036) | 0.321*** (0.040) | 0.268*** (0.027) | 0.227*** (0.024) | 0.197*** (0.024) | 0.189*** (0.032) |
Business or professional group membership | 0.158** (0.063) | 0.117** (0.059) | 0.060 (0.053) | 0.132*** (0.038) | 0.095** (0.043) | 0.169*** (0.047) |
Credit or savings group membership | −0.120** (0.048) | −0.060 (0.056) | −0.101** (0.051) | −0.156*** (0.042) | −0.168*** (0.043) | −0.192*** (0.066) |
Caste association membership | −0.049 (0.060) | −0.023 (0.057) | 0.002 (0.050) | 0.044 (0.036) | 0.058* (0.034) | 0.048 (0.046) |
Development group/NGO membership | 0.067 (0.080) | 0.273** (0.114) | 0.118 (0.091) | 0.008 (0.080) | 0.041 (0.077) | −0.013 (0.087) |
Co-operative membership | −0.096 (0.096) | −0.173 (0.106) | −0.118 (0.095) | −0.020 (0.070) | −0.039 (0.074) | 0.124* (0.075) |
Village panchayat or ward committee | −0.048 (0.064) | −0.060 (0.070) | 0.010 (0.037) | −0.009 (0.034) | 0.004 (0.037) | −0.026 (0.048) |
Log (number of hours) | 0.552*** (0.029) | 0.686*** (0.030) | 0.634*** (0.022) | 0.537*** (0.021) | 0.416*** (0.023) | 0.325*** (0.027) |
Number of workers | −0.043* (0.026) | −0.146*** (0.037) | −0.102*** (0.022) | −0.060*** (0.019) | −0.026 (0.022) | 0.003 (0.018) |
Workplace-other fixed | 0.267*** (0.049) | 0.320*** (0.049) | 0.274*** (0.033) | 0.240*** (0.030) | 0.125*** (0.031) | 0.116*** (0.039) |
Workplace-moving | 0.159*** (0.055) | 0.279*** (0.056) | 0.189*** (0.038) | 0.163*** (0.036) | 0.005 (0.031) | −0.010 (0.045) |
Constant | 5.280*** (0.280) | 2.589*** (0.332) | 3.840*** (0.263) | 5.517*** (0.234) | 7.246*** (0.199) | 8.376*** (0.255) |
Observations | 7035 | 7035 | 7035 | 7035 | 7035 | 7035 |
R
2
| 0.514 |
SCSTs | Non-SCSTs | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | |
Q10 | Q25 | Q50 | Q75 | Q90 | Q10 | Q25 | Q50 | Q75 | Q90 | |
Age | 0.087*** (0.028) | 0.053** (0.026) | 0.028* (0.015) | 0.045*** (0.016) | 0.049** (0.020) | 0.037*** (0.013) | 0.038*** (0.009) | 0.033*** (0.007) | 0.023*** (0.008) | 0.024*** (0.008) |
Age squared/100 | −0.097*** (0.034) | −0.056* (0.030) | −0.030* (0.017) | −0.044** (0.019) | −0.052** (0.021) | −0.042*** (0.014) | −0.042*** (0.010) | −0.035*** (0.008) | −0.021** (0.009) | −0.022** (0.008) |
Married | −0.142 (0.165) | −0.277* (0.161) | −0.137 (0.102) | −0.118 (0.135) | −0.273* (0.158) | 0.189** (0.086) | 0.188*** (0.049) | 0.141*** (0.039) | 0.107* (0.059) | 0.079 (0.056) |
Years of education | 0.048*** (0.014) | 0.046*** (0.009) | 0.049*** (0.009) | 0.058*** (0.008) | 0.065*** (0.009) | 0.052*** (0.005) | 0.055*** (0.004) | 0.054*** (0.003) | 0.059*** (0.003) | 0.062*** (0.004) |
Urban location | 0.967*** (0.136) | 0.813*** (0.087) | 0.618*** (0.069) | 0.524*** (0.061) | 0.383*** (0.090) | 0.921*** (0.054) | 0.719*** (0.030) | 0.579*** (0.031) | 0.528*** (0.032) | 0.495*** (0.041) |
Constant | 8.223*** (0.597) | 9.451*** (0.568) | 10.660*** (0.375) | 10.405*** (0.295) | 11.005*** (0.457) | 7.868*** (0.270) | 8.479*** (0.297) | 9.403*** (0.143) | 10.100*** (0.186) | 10.525*** (0.261) |
Observations | 1298 | 1298 | 1298 | 1298 | 1298 | 5973 | 5973 | 5973 | 5973 | 5973 |
SCSTs | Non-SCSTs | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | |
Q10 | Q25 | Q50 | Q75 | Q90 | Q10 | Q25 | Q50 | Q75 | Q90 | |
Age | 0.051** (0.021) | 0.051*** (0.016) | 0.023 (0.016) | 0.033*** (0.013) | 0.024 (0.018) | 0.051*** (0.012) | 0.041*** (0.009) | 0.023*** (0.005) | 0.016*** (0.006) | 0.010 (0.007) |
Age squared/100 | −0.061*** (0.023) | −0.062*** (0.019) | −0.029 (0.018) | −0.035** (0.014) | −0.024 (0.020) | −0.058*** (0.013) | −0.045*** (0.011) | −0.026*** (0.006) | −0.018*** (0.007) | −0.012 (0.008) |
Married | 0.108 (0.144) | 0.002 (0.112) | 0.083 (0.076) | −0.012 (0.121) | −0.243 (0.152) | 0.176** (0.073) | 0.105* (0.057) | 0.130*** (0.038) | 0.111*** (0.042) | 0.123** (0.059) |
Years of education | 0.020 (0.014) | 0.004 (0.009) | 0.003 (0.006) | 0.015* (0.008) | 0.004 (0.009) | 0.015*** (0.005) | 0.014*** (0.004) | 0.012*** (0.003) | 0.018*** (0.003) | 0.020*** (0.004) |
Asset ownership | 0.126*** (0.038) | 0.109*** (0.028) | 0.144*** (0.021) | 0.159*** (0.019) | 0.199*** (0.027) | 0.119*** (0.014) | 0.135*** (0.009) | 0.152*** (0.007) | 0.169*** (0.008) | 0.167*** (0.009) |
Urban location | 0.211** (0.097) | 0.266*** (0.070) | 0.165*** (0.064) | 0.137** (0.064) | 0.028 (0.061) | 0.352*** (0.048) | 0.280*** (0.030) | 0.232*** (0.028) | 0.213*** (0.026) | 0.188*** (0.044) |
Business or professional group membership | −0.134 (0.220) | 0.004 (0.158) | 0.259* (0.148) | 0.102 (0.100) | 0.038 (0.160) | 0.140** (0.062) | 0.046 (0.050) | 0.137*** (0.046) | 0.125*** (0.039) | 0.178*** (0.068) |
Credit or savings group membership | 0.151 (0.181) | −0.007 (0.084) | −0.147 (0.093) | −0.217** (0.110) | −0.273*** (0.094) | −0.112 (0.070) | −0.119** (0.049) | −0.156*** (0.053) | −0.159*** (0.045) | −0.188*** (0.065) |
Caste association membership | −0.146 (0.174) | −0.116 (0.090) | −0.204** (0.089) | −0.116 (0.104) | −0.016 (0.115) | −0.021 (0.061) | 0.037 (0.059) | 0.073* (0.037) | 0.063 (0.041) | 0.072 (0.049) |
Development group/NGO membership | 0.695 (0.559) | 0.577* (0.320) | 0.477 (0.492) | 0.522 (0.540) | 0.523 (0.588) | 0.241* (0.126) | 0.103 (0.110) | 0.010 (0.074) | −0.020 (0.086) | −0.039 (0.089) |
Co-operative membership | −0.302 (0.313) | −0.209 (0.143) | −0.356 (0.274) | −0.035 (0.223) | 0.053 (0.454) | −0.153 (0.121) | −0.100 (0.082) | −0.031 (0.079) | −0.022 (0.063) | 0.089 (0.070) |
Village panchayat or ward committee | −0.021 (0.157) | 0.001 (0.104) | −0.049 (0.061) | −0.136 (0.083) | −0.118 (0.127) | −0.113 (0.077) | 0.011 (0.047) | 0.020 (0.042) | 0.047 (0.037) | −0.009 (0.050) |
Log (number of hours) | 0.664*** (0.058) | 0.637*** (0.036) | 0.608*** (0.040) | 0.513*** (0.052) | 0.375*** (0.054) | 0.699*** (0.033) | 0.602*** (0.031) | 0.501*** (0.023) | 0.367*** (0.025) | 0.301*** (0.027) |
Number of workers | −0.187* (0.101) | −0.027 (0.056) | −0.090** (0.040) | −0.011 (0.047) | −0.017 (0.045) | −0.158*** (0.035) | −0.083*** (0.024) | −0.038* (0.020) | 0.001 (0.023) | 0.010 (0.021) |
Workplace-other fixed | 0.363*** (0.139) | 0.291*** (0.074) | 0.355*** (0.095) | 0.233*** (0.083) | 0.182** (0.088) | 0.308*** (0.050) | 0.276*** (0.032) | 0.233*** (0.034) | 0.117*** (0.035) | 0.138*** (0.045) |
Workplace-moving | 0.333** (0.130) | 0.246** (0.101) | 0.267*** (0.084) | 0.185* (0.100) | 0.084 (0.107) | 0.261*** (0.061) | 0.206*** (0.046) | 0.163*** (0.038) | −0.004 (0.045) | −0.004 (0.058) |
Constant | 3.582*** (0.785) | 3.908*** (0.516) | 5.105*** (0.480) | 6.056*** (0.512) | 7.713*** (0.498) | 2.559*** (0.352) | 4.322*** (0.333) | 5.884*** (0.231) | 7.678*** (0.228) | 8.726*** (0.263) |
Observations | 1252 | 1252 | 1252 | 1252 | 1252 | 5783 | 5783 | 5783 | 5783 | 5783 |
5.4 Quantile decompositions of log income gaps
Decile | Panel A Spec. 1 | Panel B Spec. 2 | ||||
---|---|---|---|---|---|---|
Col. 1 difference | Col. 2 characteristics | Col 3. coefficients | Col. 4 difference | Col. 5 characteristics | Col. 6 coefficients | |
10 | 0.999*** (0.045) | 0.539*** (0.093) | 0.460*** (0.098) | 0.949*** (0.043) | 0.829*** (0.062) | 0.12 (0.096) |
25 | 0.765*** (0.024) | 0.394*** (0.059) | 0.371*** (0.063) | 0.713*** (0.025) | 0.615*** (0.043) | 0.098 (0.069) |
50 | 0.604*** (0.017) | 0.310*** (0.046) | 0.294*** (0.042) | 0.568*** (0.018) | 0.479*** (0.038) | 0.089* (0.052) |
75 | 0.548*** (0.016) | 0.321*** (0.044) | 0.227*** (0.036) | 0.554*** (0.019) | 0.473*** (0.042) | 0.081* (0.042) |
90 | 0.546*** (0.019) | 0.315*** (0.052) | 0.231*** (0.045) | 0.569*** (0.021) | 0.522*** (0.049) | 0.047 (0.051) |
Decile | Panel A Spec. 1 | Panel B Spec. 2 | ||||
---|---|---|---|---|---|---|
Col. 1 difference | Col. 2 characteristics | Col 3. coefficients | Col. 4 difference | Col. 5 characteristics | Col. 6 coefficients | |
10 | 0.999*** (0.098) | 0.25*** (0.054) | 0.749*** (0.045) | 0.949*** (0.096) | 0.663*** (0.077) | 0.286*** (0.043) |
25 | 0.765*** (0.063) | 0.277*** (0.037) | 0.488*** (0.024) | 0.713*** (0.069) | 0.491*** (0.049) | 0.222*** (0.025) |
50 | 0.604*** (0.042) | 0.304*** (0.028) | 0.3*** (0.017) | 0.568*** (0.052) | 0.44*** (0.035) | 0.128*** (0.018) |
75 | 0.548*** (0.036) | 0.303*** (0.026) | 0.245*** (0.016) | 0.554*** (0.042) | 0.467*** (0.034) | 0.087*** (0.019) |
90 | 0.546*** (0.045) | 0.296*** (0.028) | 0.25*** (0.019) | 0.569*** (0.051) | 0.469*** (0.031) | 0.10*** (0.021) |