Paper short abstract:

The institution of caste has shaped the relations of production historically. This paper examines the change in representation in formal employment and the wage gap between deprived class and upper caste groups in India since the 1990s, more than two decades after the reservation law was implemented

Paper long abstract:

The institution of caste has shaped the relations of production historically and has a continuing impact on the modern production process. Groups lower in the social hierarchy often do not have the means of production, are paid at an unfair rate, and are less represented in the formal sector. Affirmative action policies in different forms intended to close such gaps have played an important role in ensuring social justice.

In the context of India, the Mandal Commission’s recommendation on reservation in the public sector for Other Backward Classes (OBC) identified based on social, economic, and educational backwardness was implemented in 1990, which also saw a massive protest. However, it’s debated that the 27 percent quota for the OBC has not helped much in the upliftment of the group in the labor market and other sectors. A recent study (Bera, Dubey & Malhotra, 2024) finds that though the wage gap between OBC and better-off groups is low, almost half of the gap cannot be explained by human capital endowment and institutional factors, indicating possible wage discrimination. Against this backdrop, this paper aims to measure the change in representation in formal employment and the wage gap for OBC compared to the upper caste groups between the 1990s (when Government of India implemented the law) and 2019, two decades later, and examine the accounting factors. Given the increasing identity politics and questioning of the reservation policy, this study provides evidence for the importance of affirmative action from the perspective of social equity.