Evidence of Earnings Inequality Based on Caste in Nepal

Type Journal Article - The Developing Economies
Title Evidence of Earnings Inequality Based on Caste in Nepal
Volume 52
Issue 3
Publication (Day/Month/Year) 2014
Page numbers 262-286
URL https://www.researchgate.net/profile/Menuka_Karki3/publication/264900566_Evidence_of_Earnings_Inequa​lity_Based_on_Caste_in_Nepal/links/54948b2a0cf2ec1337581942.pdf
In this article, the monthly earnings gap between Dalit and non-Dalit caste members in Nepal is estimated using two methods: Blinder-Oaxaca decomposition method and the matching-based nonparametric decomposition method. The nonparametric decomposition method estimates the monthly earnings gap based on a one-to-many matching of the given income-generating characteristics, taking into account the differences in the support of the distribution of those characteristics for Dalits and non-Dalits. According to the results, the majority of the earnings gap between Dalits and non-Dalits is attributed to the endowment effect. Dalits earn less than non-Dalits because Dalits have some characteristics that non-Dalits do not, that are unfavorable in the labor market. That this endowment effect works against Dalits could be a reflection of the social exclusion and job segregation faced by Dalits in the past.

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