Rohini Somanathan

Inequality and segregation

Despite declining group inequality and the rapid expansion of the black middle class in the United States, major urban centers with significant black populations continue to exhibit extreme racial separation. Using a theoretical framework in which individuals care about both the affluence and the racial composition of neighborhoods, we show that lower inequality is consistent with extreme and even rising levels of segregation in cities in which the minority population is large. Our results can help explain why segregation continues to characterize the urban landscape even though survey evidence suggests that individuals favor more integration than they did in the past.

Is skill-biased technological change here yet ? Evidence from Indian manufacturing in the 1990

Most high and middle-income countries showed symptoms of skill-biased technological change in the 1980s. India-a low income country-did not, perhaps because Indias traditionally controlled economy may have limited the transfer of technologies from abroad. However the economy underwent a sharp reform and a manufacturing boom in the 1990s, raising the possibility that technology absorption may have accelerated during the past decade. The authors investigate the hypothesis that skill-biased technological change did in fact arrive in India in the 1990s using panel data disaggregated by industry and state from the Annual Survey of Industry. These data confirm that while the 1980s were a period of falling skills demand, the 1990s showed generally rising demand for skills, with variation across states. They find that increased output and capital-skill complementarity appear to be the best explanations of skill upgrading in the 1990s. Skill upgrading did not occur in the same set of industries in India as it did in other countries, suggesting that increased demand for skills in Indian manufacturing is not due to the international diffusion of recent vintages of skill-biased technologies.

Mapping Indian Districts Across Census Years, 1971-2001

The Indian states have been the standard unit of analysis for research on India that uses official data sources. For many empirical questions, states are a natural starting point because state governments set political agendas and budgets and administer a wide range of services. In addition, the boundaries of many states have been unchanged for over half a century and those of all major states were largely unchanged between 1971 and 2000. This stability has resulted in the relatively easy construction and use of panel data sets at the state level and these data have been used to ask a variety of questions relating to the e ectiveness of public policy. The use of more disaggregated district data allows the study of outcomes across regions with similar historical contexts and political regimes. States have an average of 20 districts, so district level panels can also be much larger. Most district-level studies however have relied on cross-sectional analysis because district comparisons over time are complicated by multiple boundary changes. Between 1971 and 2001, the number of districts increased from 356 to 593, a rise of about 67%. The purpose of this paper is to provide information on boundary changes across districts that will facilitate the construction of district-level panel data sets. We use population data from the state and central volumes of the Census of India to document changes in district boundaries between 1971 and 2001. For each decade during the 1971-2001 pe- riod, we classify districts into three categories: those with unchanged boundaries, those created by partitioning existing districts and nally, districts whose current boundaries were located in multiple districts at the time of the previous census. We nd that 136 of the 356 Indian dis- tricts in 1971 (38%) were unaected by boundary changes over the subsequent three decades, 79 districts (22%) were cleanly partitioned into multiple districts over the same period, and the 1 remaining 141 districts experienced more complex changes. Unchanged districts obviously pose no problem for the construction of panel data and the number of these districts can be quite large for short panels. For partitioned districts we provide population weights that permit the construction of panels using boundaries of either later or earlier census years as the base. For districts that are neither unchanged nor partitioned it is in general only possible to generate accurate population weights across adjacent census years. We provide these weights separately for the three periods: 1971-1981, 1981-1991, and 1991-2001. In addition, we amalgamate neigh- bouring districts into composite regions with unchanged boundaries between each census year and 2001. These composite regions, along with the unchanged and partitioned districts, give us the complete set of geographical units with unchanged boundaries between any census year and 2001. The following section provides details on data sources and our methods and compares these to those used by other studies relying on multi-year district data. Section 3 summarises some basic patterns. Section 4 concludes with some caveats on using our data and points to the type of work needed to construct district-level series over long time periods.

A Behaviour-based Approach to the Estimation of Poverty in India

Since the late 1970s, the price indices underlying the poverty lines in India have been updated using aggregate indices. Widespread criticism of these indices led to the adoption of a new official methodology in 2011 based on unit values from consumption survey data. We propose an alternative approach that identifies poverty from consumer behaviour, based on the notion that equally poor households spend the same proportion of their incomes on food. Compared with official estimates, we find higher levels of poverty in eastern India, and generally, smaller reductions in poverty from 2005 to 2010. Our poverty numbers are validated by the calorie composition of households around the poverty lines and self-reported hunger.

Chapter 49 Public Action for Public Goods

Abstract This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model to capture the various mechanisms that are discussed in the theoretical literature on collective action. We use the model to illustrate the special assumptions embedded in many popular theories of collective action and show how their apparently conflicting predictions can be reconciled in a more general framework. This is followed by a review of empirical research on collective action and public goods. These studies, while broadly consistent with the theoretical literature, account for a small part of the observed variation in provision. Access to public goods is often better explained by “top-down” interventions rather than the “bottom-up” processes highlighted in the collective action literature. We conclude with a discussion of some historically important interventions of this type.

Racial Inequality and Segregation Measures: Some Evidence from the 2000 Census

How much of the observed segregation between black and white Americans can be attributed to income disparities between the two groups? We adopt an approach to the decomposition of segregation measures that combines the method of indirect standardization with the idea that some degree of segregation is the outcome of purely random processes. Using the dissimilarity index as a measure of segregation and data on race and income from US metropolitan areas for 2000, we find that the role played by racial income inequality in accounting for segregation is modest but varies significantly across cities.

Public Goods Access and Juvenile Sex Ratios in Rural India: Evidence from the 1991 and 2001 Village Census Data

We use village level data from the 1991 and 2001 Indian Censuses to examine how the availability of health facilities and safe drinking water at the village level affect juvenile sex ratios. In addition to controlling for village fixed effects in our estimating equation of the juvenile sex ratio, we also allow villages to be heterogeneous in terms of how their juvenile sex ratios respond to the availability of health facilities and safe drinking water. A key result we obtain is that although the presence of public health facilities does not exert a positive, significant effect on juvenile sex ratios on average, they do so in villages where the problem of discrimination against girls is most acute, i.e., in villages at the 0.10 and 0.25 quantiles of the conditional juvenile sex ratio distribution. Thus public policy can be an effective tool in improving gender balance in cases where it is most needed.

Socially Disadvantaged Groups and Microfinance in India

About two-thirds of microfinance clients in India are reported to be in self-help groups (SHGs). We study the survival of members and groups and their differential access to credit using a census of SHGs created between 1998 and 2006 in 386 villages in eastern India. Households without land and those from disadvantaged castes exhibit higher attrition rates and smaller loans, but the main predictor of differential outcomes is education. Members with formal education receive larger loans and are more likely to remain a group member. Groups with no such members are also four times more likely to become inactive.