Does Caste Matter in the Labour Markets?Evidence from an Industrial Area

This paper studies the interplay between economic and social forces that determine the labour market outcomes. It is based on a random sample of 367 workers employed in diverse industrial units located at the Peenya Industrial Area in Bangalore, which is considered the largest industrial cluster in South Asia. The field survey encompasses socio-economic variables apropos of personal, household and labour market attributes. The study establishes two features of the Indian labour market:first, social stratification, which is stark in the form of caste, determines not only wage rates but also social capital; and second, the inequality in the distribution of wage is fairly conspicuous among socially and economically disadvantaged groups. The labour market outcomes are inextricably bound together by not only economic forces but also social identities.