Saving behaviour in India: Understanding the differences across castes

Project Active from 1 Jul 2012 to 1 Mar 2013 Firms and Entrepreneurship

Researchers

Amartya Lahiri

Professor and Director of Graduate Studies, University of British Columbia

Viktoria Hnatkovska

Associate Professor, University of British Columbia

The past three decades in India have witnessed a sharp reduction in the historically large gaps in the education levels, occupation choices and wages of the backward castes called scheduled castes and tribes (SC/STs) relative to the rest of the population (non-SC/STs). Viktoria Hnatkovska and Amartya Lahiri examine how these changes have impacted the saving behavior of the two groups. They find that while the saving rates of SC/STs exceeded that of non-SC/STs in 1983, this excess saving of SC/STs declined during 1983-2010 period. A decomposition of consumption into durables and non-durables reveals that this trend also extends to durable goods consumption of the two groups. Hnatkovska and Lahiri find that a decline in wage uncertainty facing SC/STs may have contributed to the saving convergence between them and non-SC/STs.

Project outputs