Caste and Tribe Inequality: Evidence from India, 1983–1999

Despite policies targeting scheduled castes (SC) and scheduled tribes (ST), there remain large disparities of living standards between SC/ST and non‐SC/ST households in India. The SC/ST households may be poorer because they possess lower human and physical capital, but they may also earn lower returns to these assets. This study finds that 30%–50% of the welfare disparities are attributable to different returns. Such structural differences between the SC and the non‐SC/ST are partly because the SC earn lower returns to schooling. A large part of the structural disparities between the ST and the non‐SC/ST comes from the fact that the areas where the ST live are different from those where the non‐SC/ST live. In addition, the ST tend to earn lower returns even with controls for geographical conditions.