Poverty in strongRuralstrong India Caste and Tribe.pdfVIP

Poverty in Rural India: Caste and Tribe* Ira N. Gang Department of Economics, Rutgers University gang@economics.rutgers.edu Kunal Sen IDPM, University of Manchester kunal.sen@manchester.ac.uk Myeong-Su Yun Department of Economics, Tulane University msyun@tulane.edu Revised November 2007 ABSTRACT This paper analyzes the determinants of rural poverty in India, contrasting the situation of scheduled caste (SC) and scheduled tribe (ST) households with the non-scheduled population. The incidence of poverty in SC and ST households is much higher than among non-scheduled households. By combining regression estimates for the ratio of per capita expenditure to the poverty line and an Oaxaca-type decomposition analysis, we study how these differences in the incidence of poverty arise. We find that for SC households, differences in characteristics explain the gaps in poverty incidence more than differences in transformed regression coefficients. In contrast, for ST households, differences in the transformed regression coefficients play the more important role. Keywords: poverty, caste, ethnicity, decomposition JEL Classifications: I32, O12, J15 Correspondence: Myeong-Su Yun, Department of Economics, Tulane University, 206 Tilton Hall, New Orleans, LA 70118, USA. Phone: +1 504 862-8356. Fax: +1 504 865-5869. Email: msyun@tulane.edu. * This manuscript has benefited from discussions with Shubhashis Gangopadhyay and Ajit Mishra, and from comments by the two referees and seminar participants at University College-Dublin, Queens