Ram Prasad Mainali
Department of Economics
T: +44 (0)20 7040 4514
Thesis title: Economics of discrimination and induced deficiency in human capital endowment
Supervisors: Professor Gabriel Montes-Rojas and Professor Saqib Jafarey
Overview and research interests
Ram's current research incorporates two studies on labour market discrimination and its impact on deficiency in human capital endowment associated with discriminated castes (gender) which is believed to have significant economic consequences in producing income inequality across them as well as in perpetuating discrimination in the labour market.
The first study examines causes of anti-bias on female education exploring socio-cultural aspects particularly the impact of marital anticipation on female education. First, it develops a theoretical model analysing the intra-household division of labour and the interaction between the age at marriage and human capital acquisition. Second, this paper estimates the causal effect of age at marriage on education. In order to control for potential reverse causality socio-cultural instrumental variables based on the dowry culture and differences among ethnicities and regions have been employed as instrument variables. The econometric results confirm that the gender gap in education is significantly affected by cultural practices of early marriage.
The second study argues that backward castes/ethnic groups inherit deficiency in human capital endowment which in turn leads them to an inferior position in the job market. Then, it tests this hypothesis employing household survey data from Nepal, a country which experienced an age-old caste-based social division of labour in the past.
The sources of gross caste wage differentials among castes in Nepal has been evaluated on the basis of an educational effect, occupational effect, industry-type effect and firm-size effect, and these are decomposed into 'explained' and 'unexplained' components. This study finds a large portion of the caste wage differential coming from the firm-size effect, followed by the educational effect, while occupational choice and industry-type effects are not statistically significant. However, the educational and firm-size effects are small once endowments are controlled for. These results imply that labour market discrimination in Nepal works through pre-market effects relative to 'current market discrimination' and that the majority of lower-caste workers are constrained to work in smaller, low-productivity firms.
- Labour market discrimination