Saving Behavior in India

29 Pages·2013·0.38 MB·English

Saving Behavior in India: Understanding the
Differences across Castes
Viktoria Hnatkovska and Amartya Lahiri
University of British Columbia
IGC - Delhi
December 2013
Introduction
(cid:73) Preceding 30 years have seen narrowing gaps between SC/STs
and the rest
(cid:73) In recent work we find:
(cid:73) narrowing education gaps
(cid:73) narrowing occupational gaps
(cid:73) narrowing wage gaps
(cid:73) narrowing intergenerational mobility rates
Household behavior
(cid:73) How have households been responding to changing economic
circumstances?
(cid:73) saving behavior is insightful
(cid:73) Are there differences between castes in these?
This paper
(cid:73) Examine differences in behavior between castes
(cid:73) Have their saving rates responded similarly?
(cid:73) Patterns of spending on durable goods?
(cid:73) Can we explain the differences using standard channels?
(cid:73) perceptions of temporary versus permanent changes in income
Data
(cid:73) National Sample Survey (NSS) of India
(cid:73) 6 rounds: R38 (1983), R43 (1987-88), R50 (1993-94), R55
(1998-99), R61 (2004-05), R66 (2009-10)
(cid:73) Include individuals in all male-led households who are
(cid:73) 16 to 65 y.o.
(cid:73) not enrolled in any education institutions
(cid:73) working full-time
(cid:73) have occupation and education information
(cid:73) Sample size: 150,000 to 220,000 individuals per survey round
Measuring saving
(cid:73) Focus of analysis is on household saving behavior
(cid:73) NSS reports consumption but not household income
(cid:73) it only reports wage income
(cid:73) no data on income of self-employed
(cid:73) Measuring saving is a problem
Our approach
(cid:73) Multiple approaches to computing household income
(cid:73) aggregate wage incomes of households reporting wages
(cid:73) impute incomes of self-employed
(cid:73) use REDS data which contains income
(cid:73) only available for rural areas
(cid:73) limited sample
(cid:73) Multiple approaches should provide robustness
Aggregate household wage income
(cid:73) Add up average daily wage income received by all household
members
(cid:73) Multiply it by 30 to obtain a monthly equivalent
(cid:73) Compute household saving by subtracting monthly household
consumption expenditure
(cid:73) Measures misses self-employed income
Household wage distributions
(a) densities (b) gaps
.8 T).8
C/S.7
.6 wage_hh(S.4.5.6
density.4 SC/ST)−ln.1.2.3
0.2 wage_hh(non−−.3−.2−.10
4 5 6 7 8 ln−.4
log wage (real) 0 10 20 30 40 50 60 70 80 90 100
percentile
Non−SC/ST − 1983 SC/ST − 1983
Non−SC/ST − 2009−10 SC/ST − 2009−10 1983 2009−10
Household consumption distributions
(a) densities (b) gaps
1 .5
T)
.8 SC/S.4
density.4.6 SC/ST)−lnmpce(.2.3
.2 mpce(non−0.1
0 ln
1
4 5 6 7 8 −.
log mpce (real) 0 10 20 30 40 50 60 70 80 90 100
percentile
Non−SC/ST − 1983 SC/ST − 1983
Non−SC/ST − 2009−10 SC/ST − 2009−10 1983 2009−10