Michael Neubauer, a Saxena Summer Fellow and PhD student in Economics from Brown University, is studying caste-based preferences, social pressure and (statistical) discrimination in the labor market in Bihar, India this summer.
His current project investigates caste-based discrimination in rural labor markets, by using experimental methods to try to disentangle various factors causing different caste groups to experience different outcomes in the casual labor market. The study sought to replicate the laborer-landowner matching process through a controlled lab-in-the-field experiment. By analyzing the decisions made by both landowners and landless workers when faced with agricultural tasks, the researchers aimed to uncover the role of wages and caste identity in shaping these choices.
The study employed various treatment approaches to isolate the key mechanisms through which caste considerations impact decisions within the labor market. One significant aspect explored was the influence of social pressure. By manipulating the visibility of the laborer-landowner match to external observers, the researchers gained insights into the extent to which societal expectations and judgments affect employment decisions.
Additionally, the study delved into statistical discrimination as another factor contributing to caste-related dynamics in the labor market. A subset of participants was provided with supplementary information about their potential employee or employer, allowing the researchers to investigate how preconceived notions and stereotypes might influence decision-making processes.
This research sheds light on the complex relationship between caste, wages, and labor market choices in rural Indian communities. By meticulously designing and analyzing experimental scenarios, the study contributes to a deeper understanding of the intricate social and economic factors that shape employment decisions. Ultimately, these findings have implications for addressing inequality and promoting fair labor practices within these communities.