Social identity and wage discrimination in the Indian labour market

Existing studies on caste-and religion-based wage discrimination in the Indian labour market have mainly focused on the wage gap between broadly classified social groups at the mean ignoring the gap at various points on the wage distribution. Using four rounds of unit level data from the National Sample Survey covering the period 1983 to 2011-12, this study shows that the wage gap and discrimination against socially disadvantaged groups vary markedly across the entire distribution. Further the wage discrimination against the two historically disadvantaged groups, the Scheduled Castes and Scheduled Tribes, is underestimated when the comparison is with other communities. The wage inequality among social groups has widened for Muslims and remained more or less the same for STs and SCs during the post-reform period (1994-2012) and there is an increase in wage discrimination against SCs, STs and Muslims. A strong message that emerges is that social identity-based wage disparity and discrimination have not disappeared despite affirmative actions.