| The face of modern India changed forever in 1990 with the publication of the Mandal Commission Report. The report, which extended affirmative safeguards to Other Backward Castes (OBC ), was the primary catalyst to the role of caste in Indian politics that it is today. In 1999-2000 the National Sample Survey Organization started enumerating wage data based on all the four major social groups in the country. It presented a unique opportunity to test for perceived labor market discrimination against OBCs, and to forward arguments for or against their inclusion in affirmative programs.;This research employs several well-established econometric frameworks in current labor economics to look at the extent of discrimination against underprivileged groups by employers, and evaluate them against existing affirmative policies. Among the topics considered are the changes in the pay structure by occupations, differences in pay structure by social groups, and an extended decomposition model to separate out the earnings differences by occupations and social groups. In addition, a major part of this research focuses on earnings variations across different regions and across different policy regimes, and also examines the implications of selectivity bias on earnings functions and subsequent wage decompositions.;The analysis reaffirms that underprivileged groups continue to be adversely affected in the labor market on account of their caste affiliations, and that a majority of the wage differentials can be attributed to differences in productivity traits. Furthermore, affirmative policies have had a progressive impact on their wage earnings, most notably in the four OBC-dominated Southern states. It was also substantiated that OBCs and SCs face more discrimination in high-skilled occupations. In addition, OBCs and SCs belonging to the lower and middle quantiles of the wage distribution are more likely to be disadvantaged vis-a-vis Others, though there was no indication of caste-based occupational sorting. The research framework employed also tests for different forms of discrimination, and helps to determine if the changes observed were solely policy driven, or whether shifts in taste parameters have also been a factor in such variations. |
