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Inequality of opportunity among Indian women

  • Blog Post Date 05 August, 2019
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Akanksha Choudhary

Indian Institute of Technology, Bombay

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Gowtham Muthukkumaran

Indian Institute of Technology, Bombay

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Ashish Singh

Indian Institute of Technology, Bombay

Inequality of opportunity (IOp) in any society is that part of overall inequality which arises from factors beyond an individual’s control such as parental education, caste, gender, and religion. This article estimates the IOp in economic outcomes among Indian women and finds that IOp in income ranges from 18-25% and 16-21% of total income inequality in urban and rural areas, respectively. The most significant contributor is parental education in urban areas and region of birth in rural areas.

“Leveling the playing field”, rather than equalizing the final results, is the objective of a “just society”.
(Chechhi, Peragine and Serlanga 2010)

‘Just society’ is that place where everyone gets the opportunity and has the capability to realise one’s full potential as a human being. However, neither does the ideal world exist nor does the ‘just society’. The widening gap between different social classes, the rich and the poor, and rural and urban areas, has given rise to massive forms of inequality in opportunities available to the upcoming generations. Inequality in all forms – economic, social and political – has been a matter of serious debate and discussion both in national and international contexts. That said, a large number of studies have illustrated a clear trend of increasing inequality in the last three decades, not just for India but for most of the countries around the world (Morelli and Rohner 2015, Vakulabharanam 2010, Weisskopf 2011, Xie and Zhou 2014).

India and China have been among the fastest growing developing economies of the world, and often considered as its growth engines. However, India – despite showing impressive economic growth in the last three decades – has not achieved desirable improvements in the economic and social welfare of the masses. This has given rise to widening economic inequalities. India has enormous amount of diversity in terms of caste, religion, region, sector, gender, and class with different groups being at differing levels of demographic and socioeconomic welfare. The varying levels of economic outcomes between different socioeconomic groups have resulted in substantial inequalities, which have been found to be rising rapidly with time.

Besides, the scholarship on the association between economic inequality and growth of the Indian economy has raised concerns about the adverse effects of widening inequality for the Indian economic growth process (Weisskopf 2011). Also, in the recent times, globally the debate about the effect of economic inequalities on economic growth is settling towards a negative relationship between the two (Berg et al. 2012, Dabla-Norris et al. 2015, Easterly 2007). Precisely, Berg and Ostry (2011) found that a 10-percentile decrease in inequality can increase the length of a growth spell by 50%. Considering the large amount of economic cost which countries have to pay because of the existence of economic inequalities, it has become an important issue. Further, addressing inequality is one of the 17 goals of the United Nations to achieve sustainable growth to transform the world into a better, equitable and just society.

As per economist John Roemer, individuals’ achievements depend on two groups of factors – first, factors that can be said to be within their control (‘effort’) and second, factors which are not in their control (‘circumstances’, such as, gender, caste, religion) and for which individuals cannot be held responsible. In societies with low levels of intergenerational mobility, an individual’s parental background (such as, education of parents), plays a substantial role in their life choices. From the above perspective (since one does not choose one’s family), such societies are characterised by a high degree of inequality of opportunity (IOp).

The fact that women in India have long been deprived of numerous opportunities which were easily available to men in the developing state of our nation is well-documented. What is not documented is how factors like parental education, caste, region, and religion affect the chances of women among women themselves. That brings inquisitiveness for the researchers to probe IOp among women in India.

Measuring inequality of opportunity among Indian women

In a recent study (Choudhary et al. 2019), we estimated IOp among Indian Women using data from the nationally representative India Human Development Survey (IHDS) 2011-12. We included parental education, caste, religion, and region of birth to look at ‘circumstances’. Once circumstances were identified, we modeled (using the framework of Ferreira and Gignoux 2008) economic outcomes (income and consumption expenditure) as a function of circumstances and other factors. Modeled thus, we used mean-log deviation (MLD) as the measure of inequality to decompose the overall inequality (in income and consumption expenditure) into two components – first, inequality on account of different circumstances (‘inequality of opportunity’) and inequality due to all other factors.

Our results indicate that up to one-fourth of the total economic inequality among women (15 years and above) in India is due to unequal circumstances. That is, the overall IOp in income ranges from 18-25% and 16-21% (of total income inequality among women) in urban and rural areas, respectively. The corresponding figures for consumption expenditure are 16–22% and 20–23% in urban and rural areas, respectively. Also, our findings show that the parental education is the highest contributor to the overall IOp in urban areas. Further, caste and region of birth make almost similar but substantial contribution to the overall inequality in urban areas. In rural areas, it is the region of birth that is the highest contributor to the overall IOp followed by parental education and caste. Parental education not being the highest contributor to IOp in rural areas might be due to the fact that the lack of infrastructure in rural areas curtails the options available to parents related to schooling decisions about their children. For example, if parents decide about the nature of schooling which may later affect their children’s income and in turn consumption, then due to lack of options in availability of schools, even highly educated parents will have no choice but to send their children to the same (and probably only) school in the village where parents with relatively lower education are sending their children. Hence, higher parental education might not result in better education for their children which in turn will not convert into superior income (Singh 2012).

Moreover, religion also contributes to IOp in both rural and urban areas. Therefore, results from the study become important if observed through the lens of affirmative action in favour of the individuals belonging to socially weaker sections. An international comparison suggests that the total IOp in income as well as consumption expenditure for Indian women is lower as compared to the Latin American countries such as Colombia, Peru, Panama, Ecuador, Guatemala, and Brazil (Ferreira and Gignoux 2008, 2011); whereas, total IOp in income as well as consumption expenditure among the Indian women is higher than that of almost all of the European countries (Checchi et al. 2010).

Insights from the study

A silver lining in our findings is that the variation in circumstantial factors (for example, parental education, region of birth) that have been found to be most significant in contributing to overall IOp are the ones that are relatively easy to address with policy interventions; socially and culturally embedded and rigid factors (for example, caste and religion) are harder to tackle. The agenda for a government aiming to reduce IOp in India should be to direct more attention towards removing educational and regional disparities, while still focusing on promoting caste- and religion-based equality. Also, policymakers need to ensure equal opportunities and reduce disparities in economic outcomes directly. In this regard, lessons can be drawn from some recent statistics which have shown that it is wholly possible. For example, it has been found that from 2007 to 2012, the growth in mean income (average) of the poorest families in more than 50 countries, especially in Latin America and the Caribbean as well as Asia was higher than the growth in national averages, reducing the earnings disparity in those countries.

Further Reading

  • Berg, Andrew G, Jonathan D Ostry and Jeromin Zettelmeyer (2012), "What makes growth sustained?", Journal of Development Economics, 98(2): 149-166.
  • Checchi, D, V Peragine and L Serlenga (2010), 'Fair and Unfair Income Inequalities in Europe', ECINEQ Working Paper 174, Society for Study of Economic Inequality (ECINEQ).
  • Choudhary, Akanksha, Gowtham T Muthukkumaran and Ashish Singh (2019), "Inequality of Opportunity in Indian Women", Social Indicators Research, 145(1): 389-413.
  • Dabla-Norris, ME, MK Kochhar, MN Suphaphiphat, MF Ricka and E Tsounta (2015), 'Causes and consequences of income inequality: A global perspective', International Monetary Fund, Washington, DC.
  • Easterly, William (2007), "Inequality does cause underdevelopment: Insights from a new instrument", Journal of Development Economics, 84(2): 755-776. Available here.
  • Ferreira, F and J Gignoux (2008), 'The measurement of inequality of opportunity: Theory and an application to Latin America', World Bank Policy Research Working Paper No. 4659, World Bank, New York.
  • Ferreira, Francisco and Jeremie Gignoux (2011), "The measurement of inequality of opportunity: Theory and an application to Latin America", Review of Income and Wealth, 57(4): 622-657.
  • Morelli, Massimo and Dominic Rohner (2015), "Resource concentration and civil wars", Journal of Development Economics, 117(3): 32-47.
  • Motiram, Sripad and Ashish Singh (2012), "How close does the apple fall to the tree? Some estimates on intergenerational occupational mobility for India", Economic and Political Weekly, 47(40): 56-65.
  • Ostry, JD and AG Berg (2011), 'Inequality and unsustainable growth: Two sides of the same coin?', International Monetary Fund (IMF) Staff Discussion Note No. 11/08, Washington DC.
  • Singh, Ashish (2012), "Inequality of opportunity in earnings and consumption expenditure: The case of Indian men", Review of Income and Wealth, 58(1): 79-106.
  • Vakulabharanam, Vamsi (2010), "Does class matter? Class structure and worsening inequality in India", Economic and Political Weekly, 45(29): 67-76.
  • Weisskopf, ThomasE (2011), "Why worry about inequality in the booming Indian economy?", Economic and Political Weekly, 46(47): 41-51.
  • Xie, Yu and Xiang Zhou (2014), "Income inequality in today's China", Proceedings of the National Academy of Sciences, 111(19): 6928-6933.
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