revised version published as 'Poverty in Rural India: Caste and Tribe' in: Review of Income and Wealth, 2008, 54 (1), 50-70
This paper analyzes the determinants of rural poverty in India, contrasting the situation of the
Scheduled Caste (SC) and Schedule Tribe (ST) households with the non-scheduled
population. The incidence of poverty among SC and ST households is significantly higher
than non-scheduled households. Using a probit decomposition analysis, we decompose the
difference in the poverty rates between the scheduled castes (or tribes) and non-scheduled
households into a part explained by the differences in characteristics and a part explained by
the differences in probit coefficients. The paper finds that for SC households, differences in
characteristics explain the gap in poverty rates more than differences in coefficients; while for
ST households, it is the reverse. Differences in educational attainment explain about one
quarter of the poverty gap for both social groups. Occupational structure strongly matters in
determining the poverty gap for both SC and ST, as does differences in returns to individual
occupations. While poverty rates are not very different between SC and ST households, the
analysis suggests that the underlying factors for the higher incidence of poverty in these
social groups are to a large extent different.
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