Research Highlights Featured Chart

August 28, 2023

Social identity and labor market decisions

Evidence from a field experiment on the effects of caste identity in India.

Tyler Smith

An Indian man cleans a gutter in Mumbai.

Source: Odareeva Elena

India’s caste system determines much about an individual's opportunities, from marriage prospects to occupation. Such a long history of rigid social norms has also created a stigma around certain jobs and tasks. Defying these stereotypes may come with social and psychological costs.

In a paper in the American Economic Review, author Suanna Oh shows that many Indians are willing to forgo sizable wages to avoid doing tasks that don’t fit with their caste.

Her findings come from a field experiment with over six hundred men from a rural part of India. Oh offered participants a job that involved a baseline manufacturing task plus one additional task. The additional task varied across different offers and was to be performed in private. Some of these additional tasks had no caste associations, but other tasks had caste connotations that either matched an individual's caste or were associated with a higher or lower caste.

Figure 1 from Oh’s paper plots the rates at which laborers were willing to accept job offers against the time spent doing one of the extra tasks.

Figure 1 from Suanna Oh (2023)

The right panel shows average take-up rates for jobs that had tasks with specific caste associations—such as washing clothes, mending leather shoes, and sweeping latrine floors—which Oh termed “identity tasks.” The left panel shows jobs with so-called “control tasks.” These tasks required similar skills to identity tasks, but they didn’t carry any specific caste associations.

When tasks were matched to a worker’s caste (blue circles), there was little to no difference in take-up rates between the jobs with control tasks and those with identity tasks. However, for tasks associated with lower castes (red squares), there was a significant drop in the take-up rate. Even for tasks associated with higher castes (green triangles), take-up rates were lower for identity tasks compared to control tasks. 

Oh found that almost half of the workers were willing to forgo ten times their daily wage—or roughly their monthly income—in order to avoid spending only ten minutes on tasks that weren’t matched to their caste.

The findings illustrate that identity plays a significant role in the kinds of tasks that people are willing to perform and that psychological costs could be a potentially important factor in understanding labor markets.