Sunday, November 18, 2007

Is Caste Causally Responsible for Poverty?

Caste is, of course, a very good indicator of poverty in India. In the past, people were denied access to certain facilities based on their caste. This meant that certain castes weren't allowed to develop in certain ways, and it became the root cause of today's poverty structure, which is overwhelmingly biased against certain castes.

But I want to ask the question: does caste continue to be causally responsible for poverty? More specifically, conditional on the situation prevailing say 10 years ago, is caste still being used to deny opportunities to people today? Or, are we confusing the effect of the socio-economic stratum for the effect of caste?

Let's be even more specific. Descendants of poor families are more likely to be poor than descendants of rich families. Descendants of both poor and rich families are also likely to retain their caste, since caste is hereditary and inter-caste marriage is still relatively rare. Thus descendants with castes which are poorer today are likely to be poorer than descendants of castes which are richer today. In statistical terms, the wealth of the family at the start of the time period under study is a confounder for the effect of caste.

The right way to ask the question is: take two families with similar economic conditions but with different caste; is one of the families likely to have richer descendants, say 50 years in the future?

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