The role of social proximity in professional CEO appointments: Evidence from caste/religion‐based hiring of CEOs in India

Research Summary: The role of homophily in CEO appointments at the largest corporations is an important subject in corporate governance. This subject is particularly important in a country like India where a multitude of religions, castes, and communities form its social fabric. We test for the role of homophily in professional CEO appointments in India by empirically examining the preference for same caste/religion CEOs by the largest firms. Using a unique dataset, assembled by detailed identification of castes/religions from family names and counterfactuals obtained through the Coarsened Exact Matching technique, we find that caste/religion plays a crucial role in CEO selection as a source of information (positive discrimination). The evidence is not consistent with its use to pursue taste‐based preferences (negative discrimination). Managerial Summary: We test for the role of homophily in the appointments of CEOs in India by empirically examining the preference for same caste/religion CEOs by the largest firms. We find that caste/religion plays an important role in CEO selection, i.e., as a form of information or “positive discrimination.” The evidence is not consistent with its use to pursue taste‐based preferences or “negative discrimination.”     

The Kafka quagmire for the poor in India

Khare and Varman present a compellingly pessimistic analysis of the plight of the poor in India. The dilemmas of the poor are often exacerbated by large corporations seeking to find ways to market products to impoverished emerging market consumers. In India, consumers are frequently hurt by these initiatives, small retailers may suffer, while corruption and trickery by petty bureaucrats and ruthless landlords help the rich get richer at the expense of the poor. The article by Khare and Varman is a scathing indictment based on detailed ethnographic evidence but it reveals only a fraction of the disadvantages and traps of disempowerment facing those Indians living lives of great precarity. In this comment, we seek to build upon Khare and Varman’s insightful analysis both in order to reinforce their conclusions about the Kafkaesque existence of India’s poor and to introduce some further considerations and complications that make the quagmire even more entrapping. We focus on four sources of these problems: patriarchy, bureaucracy and corruption, class and caste power and hierarchies, and uneven and inadequate infrastructure. We also highlight some largely individual and non-government initiatives that may offer hope of escaping this quagmire for the poor.     

Opportunity is not everything

We experimentally investigate in village India how belief systems that hierarchize social groups affect the groups’ responses to economic opportunities. Earlier we found that making caste salient hurt low caste performance both absolutely and relative to the high caste's. To examine the possible role of mistrust, we manipulate the scope for discretion in rewarding performance. When offered a gamble in which success mechanically triggers rewards, making caste salient has no significant effect. Instead, it is in the case with scope for discretion that making caste salient creates a large caste gap in the proportion of subjects who refuse the gamble.     

Social identity and perceived income adequacy

Economists are increasingly interested in subjective well‐being, but the economic literature on perceptions of income adequacy, which is one of the factors that shape subjective well‐being, is little. Our paper fills this lacuna. We utilize nationally representative data on perceptions of amounts considered as remunerative earnings from self‐employment in India and examine how these are earnings shaped by social identity, namely, caste. We also investigate if institutional change such as the introduction of an employment guarantee scheme alters these perceptions. Finally, we examine the relationship between caste identity and actual earnings. We find that caste identity does shape both perceptions of income adequacy and actual earnings: lower‐ranked groups perceive lower amounts as being remunerative and also earn lower amounts. Further, the employment guarantee scheme alters self‐perceptions differentially for different caste groups, but in more nuanced ways than our ex‐ante beliefs.     

浅论两汉时期河湟羌人的种姓家支制度

两汉时期的羌乱给汉王朝带来了巨大的灾祸,是促使东汉灭亡的因素之一。除了共同的政治经济利益使河湟各羌落凝聚起来反对汉王朝对羌民的歧视和苛政外,其本身存在已久的种姓家支制度亦使河湟羌落间始终有种潜在的联系,也正是这种制度使得徙入塞内上百年的羌人仍与塞外的羌落间有着相同的认知,促进羌落间的聚合。因此种姓家支制度是种潜在的凝聚机制。汉王朝亦认识到羌人家支制度对其统治产生的威胁,也有意识的予以破坏。     

Caste Stratification and Wealth Inequality in India

We analyze the relationship between wealth inequality and caste divisions in India using nationally representative surveys on household wealth conducted during 1991–92 and 2002–03. According to our findings, the groups in India that are generally considered disadvantaged (known as Scheduled Castes or Scheduled Tribes) have, as one would expect, substantially lower wealth than the “forward” caste groups, while the Other Backward Classes and non-Hindus occupy positions in the middle. Using the ANOGI decomposition technique, we estimate that between-caste inequality accounted for about 13% of overall wealth inequality in 2002–03. The stratification parameters indicate that the forward caste Hindus overlap little with the other caste groups, while the latter have significantly higher degrees of overlap with one another and with the overall population. Using this method, we are also able to comment on the emergence and strengthening of a “creamy layer,” or relatively well-off group, among the disadvantaged groups, especially the Scheduled Tribes.     

Do employment quotas explain the occupational choices of disadvantaged minorities in India?

This article investigates the effects of a large-scale public sector employment quota policy for disadvantaged minorities (Scheduled Castes and Scheduled Tribes) in India on their occupational choices, as defined by skill level, during the 1980s and 1990s. We find that, first, the employment quota policy significantly affects the occupational structure of both disadvantaged minority populations. In response to the employment quotas, individuals belonging to the Scheduled Caste group are more likely to choose high-skill occupations and less likely to choose low- and middle-skill occupations, while individuals belonging to the Scheduled Tribe group are less likely to choose high-skill occupations and more likely to choose low- and middle-skill occupations. Second, the impact of the employment quotas is significantly related with an individual’s years of schooling. Overall, the results indicate that the employment quota policy changes the occupational choices of individuals within the targeted populations and contributes to their improved socio-economic standing.     

Agricultural intensification: food insecurity to income security in a mid-hill watershed of Nepal

A shift from cultivating cereal crops towards vegetables and other cash crops has evolved through the process of agricultural intensification in the hills of the Himalayan region. Agricultural intensification has attracted the attention of researchers in Nepalese agriculture due to its potential impacts on the environment and socio-economic status of farmers. Nevertheless, socio-economic drivers of agricultural intensification are as yet poorly studied in the Himalayan region. Farmers' perceptions of the effects of agricultural intensification on society and the environment are analysed in the Ansikhola watershed of Kavre district, Nepal. Before the onset of agricultural intensification, food sufficiency was the primary measure of the economic condition of farmers. However, in recent years agricultural income and profits have become key socio-economic measures. This study reveals that intensive agricultural practices shifted need-based cereal farming to market-oriented vegetable-based production systems, thereby improving socio-economic conditions for farmers. Positive changes in wealth and social status, migration from rural to urban areas, and shift in social division of labour are other important impacts.