Manisha Chakrabarty

Is Education the Panacea for Economic Deprivation of Muslims? Evidence from Wage Earners in India, 1987-2005

Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies like the one in India. We address this lacuna in the literature by examining the differences in the average (log) earnings of Hindu and Muslim wage earners in India, during the 1987-2004 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average (log) earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average (log) earnings. Citing other evidence about persistence of educational achievements across generations, however, we argue that attempts to narrow this gap using quotas for Muslim households at educational institutions might be counterproductive from the point of view of conflict avoidance.

Earnings Differences between Chinese and Indian Wage Earners, 1987–2004

This paper is one of the first comprehensive attempts to compare earnings in urban China and India over the recent period. While both economies have grown considerably, we illustrate significant cross-country differences in wage growth since the late 1980s. For this purpose, we make use of comparable datasets, estimate Mincer equations and perform Oaxaca–Blinder decompositions at the mean and at different points of the wage distribution. The initial wage differential in favor of Indian workers, observed in the middle and upper part of the distribution, partly disappears over time. While the 1980s Indian premium is mainly due to higher returns to education and experience, a combination of price and endowment effects explains why Chinese wages have caught up, especially since the mid-1990s. The price effect is only partly explained by the observed convergence in returns to education; the endowment effect is driven by faster increase in education levels in China and significantly accentuates the reversal of the wage gap in favor of this country for the first half of the wage distribution.

Does move to market have an impact on earnings gap across gender? Some evidence from India

We use Indian National Sample Survey employment–unemployment data for the urban sector for the years 1987 and 1999. Our results indicate that the gender wage gap had narrowed considerably between these two years, for all earnings deciles and for all education cohorts. The narrowing of the earnings gap can be attributed largely to a sharp increase in the returns to the labour market experience of women.

On the distributional effects of income in an aggregate consumption relation

In this paper we analyze the relevance of characteristics of the income distribution in an aggregate consumption relation. In particular, we use a statistical distributional approach toward aggregation in order to model the aggregate consumption relation of a heterogeneous population, and apply it to UK-Family Expenditure Survey data for the years 1974-1993. We consider a nonparametric estimation methodology, which accounts for the presence of continuous and discrete variables, and, for comparison purposes, a linear parametric method. A bootstrap test on the nonparametrically estimated parameters suggests that, in addition to the mean, the dispersion of income is also relevant. Additionally, the time-invariance of the parameters of the aggregate relation is rejected. These findings have important implications for constructing empirically sound models of aggregate consumption expenditure.

Preferences, Spatial Prices and Inequality

Abstract This study examines the effect of prices on inequality in rural India during the period of economic reforms and beyond (1999/2000–2009/2010). It proposes a framework for calculating ‘exact’ price indices, based on the ‘Exact Affine Stone Index’ (EASI) demand system, and shows its usefulness by calculating spatial prices and regionally varying temporal prices that allow for both differences in preferences between states and over time. The study finds that the nature of inflation has been regressive during (1999/2000–2004/2005) and progressive during (2004/2005–2009/2010) and that the effects of temporal price inflation and spatial prices on inequality are qualitatively different.

Estimating Equivalence Scales Through Engel Curve Analysis

This paper proposes a simple two-step estimation procedure for Equivalence scales using Engel curve analysis based on a single cross section data on household level consumer expenditure. It uses Quadratic Logarithmic (QL) preferences with the maintained hypothesis of Generalized Equivalence Scale Exactness (GESE) (Donaldson and Pendakur, 2004). The novelty of the proposed procedure is that it neither requires any assumption on the form in which demographic attributes enter into the system of demands, nor any algebraic specification of the underlying cost/utility functions.More importantly, it does not require a computationally heavy estimation of complete demand systems. As an illustrative exercise themethodology is applied to Indian consumer expenditure data.

Whither Human Capital? The Woeful Tale of Transition to Tertiary Education in India

In this article, we examine the issue of high dropout rates in India which has adverse implications for human capital formation and hence for the countrys long-term growth potential. Using the 2004–2005 National Sample Survey (NSS) employment–unemployment data, we estimate transition probabilities of moving from a number of different educational levels to higher educational levels using a sequential logit model. Our results suggest that the overall probability of reaching tertiary education is very low. Further, even by the woeful overall standards, women are significantly worse off, particularly in rural areas.

Mother or motherland: Can a government have an impact on educational attainment of the population? Preliminary evidence from India

In this paper, using data from the 61st round of the (Indian) National Sample Survey, we examine the relative impacts of personal-household and state-level characteristics (including government policy) on the likelihood of transition from one educational level to the next. Our analysis suggests that the most important factors driving these transition likelihoods are personal and household characteristics like gender and education of household heads. However, state-level characteristics and government policies have a significant impact on these transition likelihoods as well, especially for transitions from the lowest levels of education to somewhat higher levels. The odds of making the transition to higher education, especially tertiary education, are systematically lower for women than for men, for individuals in rural areas than those in urban areas, and for Muslims than for Hindus. An important conclusion of our analysis is that there is significant scope for government policy to address educational gaps between various demographic and other groups in the country.

A Framework for the Simultaneous Measurement of Spatial Variation and Temporal Movement in Prices in a Heterogeneous Country: The Dynamic Household Regional Product Dummy Model

This paper contributes to the growing literature on spatial prices in large heterogeneous countries. While the literatures on spatial variation and temporal movement in prices have grown in parallel, this study marks a departure by providing a unified treatment and proposing a comprehensive framework that allows both approaches. The proposed model is based on twin extensions of the household version of the “country product dummy model” by allowing for a dynamic stochastic specification and interdependence of spatial prices of geographically adjacent regions. Tests of temporal stability and regional independence of the estimated spatial prices are proposed and applied in this paper. The paper shows that the introduction of an autoregressive error process of order one, AR(1), improves the efficiency of the estimates of parameters, urban‐rural and temporal price indices under certain conditions. The Indian application points to a rich potential for using the proposed framework in cross country comparisons such as the International Comparison Program (ICP) exercises.

Relative cost of children: the case of rural Maharashtra, India

Abstract Conventionally, measurement of cost of children by iso-prop method [Int. Stat. Inst. Anal. 9 (1895) 1] involves equating budget share on food of the two households compared. In this paper we use an alternative necessary commodity, viz., adult good (as suggested by Blackorby and Donaldson [The Measurement of Household Welfare, Cambridge University Press, Cambridge (1994)]) in place of food and measure the relative cost of a child using iso-prop method in a single equation framework as well as in a demand system framework. The demand system, proposed herein, is a rank-two Quadratic Logarithmic (QL) system. Household level consumption expenditure data for the rural sector of Maharashtra, India, are used in this study. The results indicate that the nature of the commodity along with the effect of children on consumption of that particular commodity, plays a major role in determining child cost.