Class in caste: Inequalities in human capital investments in children in India

Caste is a unique marker of social stratification in India. There are significant eco- nomic inequalities and considerable disparities in educational achievements between historically disadvantaged caste groups and Others. Unequal investments in their chil- dren’s human capital by caste can perpetuate income inequalities and reproduce class differences between caste groups. This paper analyses caste-based disparities in house- hold expenditure on children’s school education using nationally representative social expenditure data on education from 2007–08 and 2017–18 in India. The paper uses a recentered influence function (RIF) based decomposition analysis to pinpoint the key factors underpinning the disparity in private educational expenditure between disadvantaged caste groups and Others. Further, to overcome the problem of heterogeneity of data the study also employs propensity score matching (PSM) as robustness check for the decomposition analysis. The findings from decomposition and matching approaches reveal that differences in endowments, specifically income differences, between caste groups explain most of the caste-based gap in children’s human capital investments. The study has implications for public policy to address educational and economic disparities between disadvantaged caste groups (ST, SC and OBC) and Others in India.