Causes of socioeconomic inequality in Nepal: evidence from a panel study
Description
The study examines the determinants of socioeconomic inequality in Nepal using panel data from Living Standard Surveys 2004 and 2011. Findings from the random-effect model show that a higher level of education attainment is associated with a higher annual wage. Also, people from Dalit, Janjati & Adiwasi, and Marginalized groups, on average, earn lower wages compared to the people from the upper caste i.e., Bahun, Chettri & Newar. Similarly, the results from the panel probit model show that being Dalits and rural areas are associated with an increase in the probability of labor force participation and employment in general, but a decrease in the probability of salary-based or full-time employment. These findings indicate that more Dalits and people from rural areas are employed on a part-time or contract basis that yields lower annual wages. Finally, the findings from the Oaxaca blinder decomposition show potential discrimination against females, Dalits, and Marginalized classes in annual wage earnings and/or in a full-time job. The results from the explained component of the Oaxaca blinder decomposition suggest that inequality in annual wage earnings or full-time jobs can be mitigated by investing more in education and other skill-building trainings among females and Dalits. However, the unexplained portion of the decomposition indicates that reducing inequalities that may have resulted from discrimination requires political and socially inclusive policies.
Causes of socioeconomic inequality in Nepal: evidence from a panel study
The study examines the determinants of socioeconomic inequality in Nepal using panel data from Living Standard Surveys 2004 and 2011. Findings from the random-effect model show that a higher level of education attainment is associated with a higher annual wage. Also, people from Dalit, Janjati & Adiwasi, and Marginalized groups, on average, earn lower wages compared to the people from the upper caste i.e., Bahun, Chettri & Newar. Similarly, the results from the panel probit model show that being Dalits and rural areas are associated with an increase in the probability of labor force participation and employment in general, but a decrease in the probability of salary-based or full-time employment. These findings indicate that more Dalits and people from rural areas are employed on a part-time or contract basis that yields lower annual wages. Finally, the findings from the Oaxaca blinder decomposition show potential discrimination against females, Dalits, and Marginalized classes in annual wage earnings and/or in a full-time job. The results from the explained component of the Oaxaca blinder decomposition suggest that inequality in annual wage earnings or full-time jobs can be mitigated by investing more in education and other skill-building trainings among females and Dalits. However, the unexplained portion of the decomposition indicates that reducing inequalities that may have resulted from discrimination requires political and socially inclusive policies.