Levels and Dynamics of Indian Inequality: Filling in the Blanks

Prof. Peter Lanjouw, VU University Amsterdam

Income inequality in India is in the public eye.  Several high-profile studies have documented that alongside the acceleration of overall economic growth, income and wealth of the rich has grown disproportionately, resulting in current levels of inequality not seen since the days of the British Raj.  While these findings have stirred discussion they have not gone uncontested.  This paper reports on findings from a collection of specially commissioned studies that engage with, but also broaden, the debate.  The paper explores aspects of Indian inequality  drawing on a wide range of data sources and covering the period 1983-2012. It reports evidence in support of the contention that inequality has been rising, but suggests also that this process has not been inexorable over the entire period.  The paper asks, further, whether an exploration below the all-India level merits attention.  It examines in detail, for example, the dynamics of inequality associated with structural transformation at the village level, and provides evidence suggesting that changes in village-level inequality account for a large part of the overall story.  The paper considers how patterns of income and education mobility have evolved alongside the rising levels of income inequality.  Although there is evidence of rising economic mobility overall, upward and downward movements in relative position are differentially associated with specific household characteristics. An exploration of intergenerational educational mobility suggests that in regions where educational mobility is low, income inequalities tend to rise. The paper concludes with  a discussion of possible  implications for policy.

About the speaker

PETER LANJOUW, is professor in the School of Business and Economics of VU University Amsterdam.  Prior to joining the VU in 2015 he worked for more than 20 years in the research department of the World Bank, most recently as manager of the Poverty and Inequality Cluster. He completed his studies at the London School of Economics, defending his Ph.D thesis in 1992. His research focuses on the measurement of poverty and inequality as well as the analysis of rural development, notably via the study of a village economy in rural India and the broader process of rural non-farm diversification.  He has taught at the University of Namur, and the Foundation for the Advanced Study of International Development in Tokyo, and has been a visiting scholar at UC Berkeley, the Delhi School of Economics and the London School of Economics. He is currently editor of the World Bank Research Observer and is a former associate editor of the World Bank Economic Review as well as a past editorial board member of the Journal of African Economies.  He has co-authored several books, including most recently with Himanshu and Nicholas Stern, the book How Lives Change: Palanpur, India and Development Economics (OUP, 2018)  He has also published in such leading economics journals as Econometrica, and the Economic Journal, as well as numerous field journals such as Journal of Development Economics, The World Bank Economic Review and World Development.

Date: 11 October 2018

Time: 12:00 - 13:00