Introduction:
When looking at caste and employment in India it can be seen that it can be seen just as not just as a social idea but rather as an identity that has been shaped by what kind of work one’s ancestors have for centuries. The caste system has operated as a socio-economic and cultural framework where individuals are born into a particular occupation and stepping outside those boundaries becomes nearly impossible. Caste-based communities have been tied to certain occupations and those roles carried expectations, status, and stigma that lasted across generations. Work and identity weren’t separate categories but they were so deeply intertwined with each other that an individual's position in the labour market was decided at birth.
The Constitution of India abolished untouchability on January 26, 1950 and promised equality but the marks of this longstanding social system continues to linger in today’s labour market. Untouchability refers to the practice of treating certain individuals or communities as so impure that physical contact with them is believed to transmit impurity to others. Caste identity still has a profound influence on who gets hired, and what kind of job they are considered fit for as well as how much they are paid. These patterns are still relevant in both the formal and informal economy. In the caste system, the Dalits fall at the bottom of the caste system. As a result of this Dalit workers can primarily be seen concentrated in informal, low paying, and often stigmatized forms of work, while upper caste groups dominate professional and higher income spaces. These hierarchies have slowly adapted themselves into the modern economic institutions.
Caste hierarchies have adapted themselves into the modern economic institutions. This has created runs through India’s development story. On paper, India as a country honours equal opportunities and democratic fairness but in everyday life, caste networks, inherited privilege, and social hierarchies still play a role in access to education and employment. Reservations as a form of affirmative action were designed as a mechanism to combat these deeply-rooted caste-based inequalities, but the persistence of wage gaps and uneven representation proves that these policies alone can’t undo this long system of social and economic inequality.
This research project looks at how caste distinctions and discriminations continue to play a significant role in labour market outcomes in contemporary India, as well as the extent to which state actions and laws, such as reservation policies, actually and effectively challenge the longstanding status quo. It argues that while state interventions have created important gains in access, representation, mobility, and formal equality, their effects remain partial because caste continues to operate as a deeply rooted social structure shaping labour dignity, and social value. The project therefore examines not only whether reservation creates opportunities, but also why substantive equality remains incomplete despite these constitutional and policy efforts.
2.Background and significance:
Understanding why caste continues to play a role in the Indian labour market requires looking back at the foundations of the system itself. Historically, caste didn’t just classify people socially but rather assigned individuals to specific occupations, and these roles were hereditary, rigid, and deeply unequal. Certain groups were confined to difficult and poorly valued work while others were placed at the top of the hierarchy with access to education, authority and comfort just because they were born into a particular family. These divisions have been reinforced by a whole range of exclusionary practices, segregation, social stigma and rules that reduced social interaction between higher and lower caste groups. This as a whole created a structure where economic opportunities were linked to birth, not choice, and this logic shaped generations of labour relations.
The historical roots of caste become crucial to understand its continued influence in the present times. Long before the emergence of the modern day labour market, caste functioned as a structure that shaped daily social relations through hierarchies of status and hereditary occupation. These hierarchies were not just cultural or religious, but also economic. They played an active role in shaping access to education, power, land, and forms of dignified labour. Over the years, caste became a predominant part of everyday institutions and practices, resulting in inequality being reproduced across generations.
Understanding this historical context is necessary to see how these structural conditions have quietly carried into the modern economy. The forms look different but the patterns of caste-based discrimination feel familiar. Studies by Sukhadeo Thorat and Katherine S. Newman (2007) have shown, how identical CV’s with different caste coded surnames receive different responses, revealing how discrimination didn’t stop with industrialisation or liberalization. Caste networks continue to shape who has access to what sorts of jobs and opportunities. Dalits remain overrepresented in informal sectors where wages are low and protections are minimal. Even when Dalit workers have similar educational qualifications as others, wage disparities still exist suggesting the inequality is structural rather than individual.
India’s response to these historical injustices came mainly through state intervention. The Indian Constitution abolished untouchability, and provided safe guard systems for Scheduled Castes and Scheduled Tribes. Later, the Mandal commission expanded the reservations to also include the Other Backward Classes in the education and public employment sectors. The aim of these policies was not just about representation but a form of economic correction to compensate for years of exclusion and create pathways into institutions that were historically closed to marginalized communities. In theory, reservations were meant to reduce the rigidity of caste by opening up access to education, jobs, and political space.
Yet, despite these measures, the gap remains persistent. Income disparities between Dalits and upper caste groups are still prevalent across sectors. Dalits still remain underrepresented in the private sector, where the reservation policies do not apply. Occupational clustering remains with many Dalits concentrated in low paid and stigmatized work even in urban settings. Dalit women face an added disadvantage due to the intersection of caste and gender which often results in some of the lowest earnings and least secure jobs in the economy. These trends have repeatedly appeared in the official surveys and academic research.
These persisting inequalities beyond economics reveal a deeper tension between India’s democratic values and its social hierarchies. Hence, research on caste and labour remains significant for understanding contemporary India. It looks into how old power structures survive and take up new forms and how far the country has gone in translating this equality on paper into equality in practice.
2.1 Research question and Puzzle:
The central question of the research is: How does the historical and contemporary Indian caste system perpetuate the structures and conditions labour market discriminations inequalities, and to what extent have reservation policies translated into real improvements in employment access and representation for Dalits?
The research will comprise sub sections. Following a detailed historical background, the next section will examine the mechanisms of exactly how the caste system has an effect on outcomes and in ways that are often obvious. This includes discrimination in hiring practices, the use of caste-based networks and even subtle forms of exclusion that show up in certain workplaces. Another part will involve engaging with empirical evidence that already exists and talks about studies suggesting wage gap differences and occupation segregation. These numbers suggest the persistent and patterned caste-based inequality.
A second layer of the research will look at state intervention. Reservations were meant to function as a system of correcting the long lasting inequalities but how effective have they been? Do they actually reduce the wage gaps? Do they increase representation? Or do they as many argue end up being more symbolic rather than transformational. Understanding this will require looking at both the outcomes and political context in which these policies are being implemented.
The research will also briefly explore the regional differences in the workings and outcomes of the caste system in different states. For example, states such as Kerala, Maharashtra, Uttar Pradesh exhibit sharp variations in social, historical and economic approaches to welfare and caste politics. Bringing these variations together will play a crucial role in understanding how caste and labour markets interact across the country rather than assuming a single national story.
The puzzle of my research is that even though caste-based exclusion has been abolished and formal equality has been established due to the frameworks set by the Indian Constitution, labour market inequalities for Dalits continue to exist. If formal equality and affirmative action were aimed at dissolving caste disadvantages, why does inequality still exist in access and representation?
Taken together, these questions provide a framework for my research and a structure for investigation.
2.2 Relevance and Rationale:
The importance of this study becomes clear when you look closely at how uneven and unequal the Indian labour market still is. Dalit workers continue to face wage gaps and limited mobility, especially through jobs in the informal sector that are usually already poorly paid. Data from the National Sample Survey Office (NSSO) and Periodic Labour Force Surveys (PLFS) has shown this pattern over the years.
Researchers like Sukhadeo Thorat, and Katherine S. Newman (2007) have written extensively about hiring discrimination. Their findings talk about how identical CVs receive different responses purely based on caste-linked surnames and further make it clear that these inequalities are not accidents but are built into the structure; hence proving why state intervention is necessary. The reservation system is not merely a moral gesture but rather is a deliberate labour market regulation tool. This acts as a way of affirmative action in the Indian context and stretches across both the education and employment sector. This is a case of a democracy trying to correct a deeply entrenched historical socio-economic hierarchy through explicit policy. Whether or not this has worked as intended has become a source of multiple debates.
Some argue that reservations have created new opportunities for the historically oppressed communities while others say that it has only produced symbolic representation without having an effect on the deeper inequalities. Multiple debates are centered around who gets benefited and who gets left out and whether or not these policies need to be revisited. Furthermore, there are claims, especially in the elite circles, that modern markets have become “casteless” even though the data pushes back against this idea. Regional differences also play a role in this by having varying policies on a state level. A state like Kerala looks very different from, say, Uttar Pradesh or Bengal in how reservation policies play out on the ground.
This makes the study crucial in order to understand the Indian labour market. Caste plays an important role in understanding economic, political and social realities, and offers insights on affirmative action, social justice and what equality actually means when history refuses to disappear.
2.3 Positionality Statement:
When I write about caste and labour in India, I’m very aware of the perspective I am doing so from, that is my own. I grew up in Delhi, in a middle class household. My family background comes from that of different perspectives. My mother belongs to a Pandit caste, one of the traditionally upper castes, while my father comes from a Shudra caste which is one of the lower castes. I don’t identify as a Dalit, and I’ve never experienced the kind of caste-based discrimination that shapes daily life for many individuals.
Due to living in a big city my whole life, my exposure to caste discrimination has mostly been indirect through books, papers, news,and stories rather than lived experience. The reality faced by Dalits on an everyday basis especially in rural and semi rural areas, were realities that I never had to experience. I carry a kind of distance from these realities, and I feel it is extremely crucial to acknowledge that before making claims about inequality or justice.
This research, hence, is a way for me to attempt to bridge this distance. I will be trying to understand these structures that have greatly benefited me in ways that I haven’t seen while I was growing up. At the same time, I know my interpretations will come with certain biases shaped due to privilege, comfort, and education.
3. Literature Review:
The literature on caste and labour in India brings together works from sociology, economics and political science to explain how caste systems continue to matter in shaping contemporary economic outcomes. Sociological writings have treated caste as a system of social exclusion that places individuals into hierarchical structures of status and work. Economic research further backs this by showing how these hierarchies translate into unequal wages, occupational segregation and limited mobility in the modern day labour market. Political studies also look at how the Indian state has attempted to correct these inequalities through affirmative action and reservation policies, while also looking at debates about merit, governance and redistribution in a changing economy.
The central aim in this section is to better understand how the prevailing scholarship in different disciplines reveal how caste continues to structure the modern day labour market in India, why state intervention has become necessary to address these inequalities, and why the meaning and effectiveness of these interventions remain contested. Research on caste and economic exclusion have shown that historical disadvantages did not completely disappear with the rise of industrialisation or constitutional equality but instead they became intertwined with the modern institutions. Empirical studies of caste discrimination and labour market outcomes have shown that caste-based inequalities exist even if individuals have similar educational backgrounds and skill sets, making the point further clear that market forces cannot alone undo the actions of this hierarchical system.
This section looks at bringing these strands of literature together. It looks at caste as an economic institution, moves to empirical evidence on modern day labour market inequality and looks at means through which this discrimination still persists. It further looks at the rationale, and political dimension of these reservation policies as well as looking at debates around resistance, expansion, and regional variation involving these policies. Bringing these perspectives together will allow for a better understanding of looking at whether the reservations have translated into meaningful improvements in labour market outcomes for Dalits, and will set the foundation for the research question that is being looked at in this thesis.
3.1 Conceptualising Caste as an Economic and Labour Market Institution:
To look at why caste still holds relevance in the Indian labour market today, it becomes important to look at how caste not only functions as a cultural hierarchy but also as an institution that has historically organised work, status, and livelihood. Caste has historically determined what kind of work various communities could and couldn’t do and what value that work carried. These roles were hereditary, which meant that individuals were born into particular occupations, and the economic value that was attached to the work they did followed them for generations. This created a system where economic opportunities were generated not from effort or skills, rather from birth.
Dr B.R. Ambedkar becomes a crucial figure for the purpose of this discussion. He was not only one of the primary architects of the Indian Constitution, but also a sharp critic of caste as a system of social and economic oppression. His analysis is relevant for this thesis as he frames caste not just as a cultural hierarchy, but also in the form of a structure that plays a role in organising labour and exclusion. He says, caste is “not a division of labour, but a division of labourers,” organised into a hierarchy graded from top to bottom (Ambedkar, 1936). This understanding that caste acts as a system of economic hierarchy continues to influence contemporary analyses of inequality, including Kumar and Behera’s (2025) argument that caste-based disadvantage cannot merely be reduced to income or class alone. According to these authors, caste did not just assign work, it assigned a position in society. Occupations associated with the Dalit communities were treated as demeaning, while upper caste occupations carried social respect and authority. This also meant that the grading of labour also resulted in the wages and opportunities being structured in the same hierarchical structure.
Thorat and Newman (2007) look at this argument from an economic point of view. They describe caste as a structure that fixed economic rights by birth, was enforced through strong social penalties, and produced what Amartya Sen termed as “forced exclusion” (Sen, 2000). This exclusion further restricts Dalits from land, education, and occupational mobility, confining them to the lowest paid and most stigmatised work. Looking at modern India, they argue that these rigid barriers still continue to influence these patterns of unequal wages and discriminatory hiring practices, not because Dalits are less skilled or qualified but because caste continues to regulate market access and economic mobility (Thorat and Newman, 2007).
This also applies to development of state policy. As Lelah Dushkin talks about in her account of Scheduled Caste legislation, stating that legal equality “perpetuates the inequality”, because caste disadvantages were already deeply embedded in social and economic life (Dushkin, 1967). Affirmative action policies or reservations therefore not meant as charity, but rather as a mechanism to counter a system which started off as unequal. Looking at caste as an economic institution helps explain why inequalities persist even after constitutional reforms (Dushkin, 1967). Work has historically defined dignity and social status that has often been allocated through caste lines. The modern day labour market continues to carry this forward. Formal equality alone cannot undo these deep rooted social inequalities. The economic logic of where caste continues caste continues where birth determines and continues to shape wages, access and mobility in India’s modern day labour market.
3.2 Caste-based Discrimination and Labour Market outcomes in Modern India:
A large body of empirical research claims that caste-based inequality in India’s labour market has not disappeared with economic growth or legal reforms. Instead, caste continues to shape what kind of work, how secure it is, and how much it pays. One of the ways in which this can be seen is through occupation segregation. Upper-caste domination in salaried and secure jobs can consistently be seen in national datasets such as the National Sample Survey Office (NSSO) and the Periodic Labour Force Surveys (PSSO), showing minimal upward mobility for Dalit workers across various sectors despite decades of economic growth.
Thorat and Newman (2007) provide an empirical account of how these inequalities operate in the contemporary labour market. Looking at both quantitative and experimental data, they show how caste-based discrimination persists even within the formal sector of the Indian economy. Their analysis shows that Dalits experience unequal treatment in hiring practices, wages, and working conditions, despite having similar qualifications and human capital as the upper-caste applicants. Their argument directly challenges the idea that labour markets function in a neutral or merit based framework once the education gaps are addressed.
Disparities in wages further add to this idea. Thorat and Newman (2007) cite econometric evidence showing a significant wage difference between Scheduled Caste and Scheduled Tribe workers compared to other similar upper caste workers, indicating a clear disparity in income levels which cannot be explained by productivity. Scheduled Castes refer to communities historically subjected to untouchability within the Hindu caste hierarchy, whereas Scheduled Tribes refer to constitutionally recognised tribal communities identified separately under Article 342 of the Indian Constitution (Nath & Parakandathil, 2015). These wage gaps persist even after controlling for variables such as education and experience, suggesting that discrimination and exclusion remains deeply embedded in labour market processes. Rather than dissolving over time, caste-based income inequalities continue to be present across generations.
Another crucial aspect of caste-based labour inequality stems from the concentration of Dalits in informal and insecure employment. Informal work is categorised by low wages, lack of social protection, and limited opportunities for advancement. Data from NSSO and PLFS has reflected Dalit overrepresentation in these sectors, while having limited representation in stable and high paying jobs. Kumar and Behera (2025) argue this pattern reflects the long term effects of caste-based exclusion practices, wherein historical disadvantages continue to play a role in current day employment outcomes even in a liberalised economy. Emphasising that caste remains a strong predictor for socio-economic position, and that economic advancements have not alone translated into equal labour market outcomes for historically marginalized communities.
The socio-economic nature of caste reflects the contrast between market efficiency and social exclusion. Economic reasoning suggests that discriminatory practices weaken over time as markets reward productivity and efficiency. However, the Indian case suggests otherwise. From the line of argumentation presented by Thorat and Newman (2007), discrimination in labour markets is self correcting as it is reinforced due to societal norms, surplus labour, and unequal access to networks and opportunities. Even with investment in education and skills for the Dalit populace, they continue to face barriers that limit their ability to convert these investments into secure employment and equal wages. Taken as a whole, this literature reflects that caste-based inequalities in the modern labour market is not just a leftover from the past, but rather an active and on going socio-economic phenomena.
Occupational segregation and wage disparities exist despite economic growth and formal equality, reflecting the structural forms of exclusion rather than individual failure. This persistence helps explain why state intervention continues to be seen as necessary, and why debates around reservations and affirmative action remain central to discussions of labour market justice in India.
3.3 Reservation as State Intervention:
Rather than viewing reservation policy purely as a moral commitment or a constitutional promise, a significant body of literature has looked at it as a form of state intervention designed to correct historically produced structural inequalities. Historically, policy regarding reservations has often been grounded in the recognition that formal equality, by itself, could reproduce rather than dismantle the pre-existing inequality in the society that have been shaped due to the caste-based hierarchies. As Lelah Dushkin, argues in her text regarding scheduled caste policy, imposing legal equality on an unequal social structure, “simply perpetuates the inequality", making differential treatment in the favour of the most disadvantaged not an exception but rather a necessity (Dushkin, 1967). From this perspective reservation policies were conceived as means of protective and corrective mechanisms, intending to correct the effects of the structural exclusion rather than merely compensating individuals for the past injustices.
Dushkin’s (1967) analysis talks about how reservations were never meant to function as short term welfare measures. Rather, they were designed as administrative and institutional measures to ensure the benefits reached communities that have systematically been denied access to education, employment and right to political power (Dushkin, 1967). The logic behind this is structural, stating that caste-based disadvantages have operated across generations and domains, making universal policies inadequate.
However, a recurring theme in the pre existing literature is the persistent gap between representation based success and substantive economic outcomes. While reservations have certainly increased the participation of scheduled castes in legislatures, public sector employment, and higher education, their impact on wages, occupation mobility and long term economic security has been limited. Kumar and Behera’s (2025) recent evaluation of affirmative action policies look at this issue in further detail. Drawing from data across spheres of employment, education and health, they show how caste continues to be a strong indicator of socio-economic outcomes (Kumar and Behera, 2025). These findings challenge the line of argumentation that places merely economic criteria as a sufficient substitute for caste-based reservations. Their analysis suggests that even when Dalits achieve access to reserved positions they continue to face structural and social disadvantages ( discrimination, occupational segregation, weaker access to networks etc.) which further continues to shape the labour market outcomes. As a result, improvement in representation does not necessarily translate into wage equality or upward mobility. Further, reinforcing the idea that reservations address only one aspect of exclusion that is access. These policies alone do not dismantle the mechanisms through which inequalities are reproduced within workplaces and sectors.
The limitations of these reservations become even more apparent when looked at from the perspective of the broader structure of India’s labour market. First, reservations remain confined to the public sector, which employs a limited share of the workforce. Second, the private sector remains outside the scope of the affirmative action policy, despite being a major force of employment generation in the post liberalisation era of the Indian economy. Third, multiple studies including that of Kumar and Behera (2025) note, Dalit workers remain disproportionately concentrated in the informal sector, where reservations do not apply and where wages are low, job security is minimal and means of social protection is weak (Kumar and Behera, 2025).
Thus, reservations are polcies that are necessary but also insufficient. They play a crucial role in opening access to institutions that have historically excluded lower castes, especially in public employment and education. Understanding these institutional limitations is essential for evaluating what reservations can and cannot achieve in reshaping the caste-based labour market inequalities.
3.4 Political Economy of Reservations:
Other works looks at reservations with a focus on labour market access and redistribution, another parallel aspect of these policies looks at how reservations acts as a tool for political intervention that reshapes governance incentives and power relations. This perspective shifts the analytical lens outcomes such as employment and wages to these policies that affect political behaviour, accountability, and institutional performance.
Anderson and Francois (2023) talk about this in their formulation of the “Politics of Fear” framework. By looking at theoretical and empirical evidence from villages in Maharashtra, they argue that caste-based political reservations, can lead to improvements in governance quality, when defined under specific conditions (Anderson and Francois, 2023). Maharashtra is a state located in the western peninsular region of India. They argue this is based on the assumption that when politics is organised based on identity lines (such as caste), leaders often enjoy incumbency advantages. Even leaders who have proved to be inefficient in their role may continue to receive support from their particular caste group because of the fear that replacing them might result in the political power shifting to another group altogether.
Political reservations intervene in this dynamic by guaranteeing representation for historically marginalised groups, thereby reducing the fear of the group displacement. Once a group’s access to political office is institutionally secured, voters receive more choices and also receive the power to replace underperforming leaders from within their own group without the risk of losing this political power to another community (Anderson and Francois, 2023). In this sense, reservations do weaken incumbency advantages but also create incentives for improved governance.
Furthermore, Anderson and Francois (2023) emphasize that these outcomes are not universal. The impact of the reservations does depend on factors such as the size of the caste group and the nature of political competition. Governance improvements are likely when the group is large enough to be politically relevant but not extremely dominant that the competition within the group disappears (Anderson and Francois, 2023). In a context where caste groups are either too small to sustain meaningful competition or large enough to guarantee power even without reservations, quotas have limited effect on governance quality.
3.5 Resistance to Reservation: Contesting Merit, Deservingness, and Fairness:
Alongside institutional debates, researchers also looks at how caste-based affirmative action is often shaped due to ideological contestation. Opposition to reservation have frequently articulated this through the language of merit, fairness and efficiency, framing affirmative action as a means of natural selection rather than as a response of correcting historically structured inequalities. Through this argument, inequality is framed as an individual outcome, while the social conditions that have produced these unequal starting points remain largely unaddressed.
Hegade and Andalgavkarkulkarni’s study of private education in Maharashtra talks about how these narratives operate in real life practice. Looking at the data from surveys and interviews, they found that students who benefit from gender based affirmative action may still resist caste-based reservations, suggesting that support among marginalised identities is not inherent (Hegade and Andalgavkarkulkarni, 2025). While respondents supported policies around gender based inclusion, many opposed Scheduled Caste and Scheduled Tribe reservations by invoking meritocratic fairness. In their research, quantitative results do not identify a strong predictor of resistance, while qualitative responses revealed a moral distinction on how deservingness is evaluated between these groups eligible for the affirmative action.
Three main narratives arrive from this analysis. First, caste disadvantages are often overlooked, looking at historically disadvantaged groups as already advanced. Second, economic hardship among upper caste students is emphasised, further instating the idea of inequality as a class based rather than structural. Third, affirmative action is framed as an excessive measure of redistribution extending beyond its legitimate scope (Hegade and Andalgavkarkulkarni, 2025). As a whole, these various interpretations shift the debate from reparative justice to individual fairness and add to the demands for income based criteria.
3.6 Economic Criteria and caste-based Justice:
Debates around affirmative action in India have shifted to the narrative of basing economic criteria for reservations. While this is framed as a move towards fairness and neutrality, many have critiqued this move as moving away from the original reparative logic that underpinned these caste-based reservations. The foundational idea of affirmative action was not simply poverty alleviation, but rather the correction of historical exclusion linked to caste-based status. Moving towards an income based criteria would redefine this problem as an individualistic narrative rather than benefitting communities that have faced historical exclusion.
Hegade and Andalgavkurkulkarni (2025) note that modern resistance to caste-based reservations invoke economic hardships as the more legitimate basis for redistribution, further reflecting a shift from structural justice to individualised fairness (Hegade and Andalgavkarkulkarni, 2025). In their analysis, students show a preference for income based affirmative action, revealing how caste disadvantages are downplayed and are viewed secondary to class. This does not deny the inequality, it reinterprets it as economic disadvantages rather than as an outcome of institutionalised social hierarchy.
Kumar and Behera (2025) similarly argue that caste remains a decisive economic determinant of socio economic outcomes across the spheres of employment, education and health and cannot be simply reduced to income levels alone (Kumar and Behera, 2025). They say income based criteria alone fails to capture cumulative and intergenerational disadvantages such as access to occupation, and historical patterns of discrimination that have been embedded in the current social networks. Even when income thresholds are met, caste-based exclusion may be reflected in the form of hiring biases, occupational segregation, and unequal access to capital.
Policies such as the Economically Weaker Sections (EWS) reservation further reflect this. EWS policy is a ten percent reservation in the Indian government jobs and educational institutions for economically disadvantaged individuals belonging to the general category (Hussian, Wani, & Bole, 2022). By viewing income as a threshold for disadvantages, risks obscuring caste as a structural institution and redirect resources towards groups that may not have faced systematic exclusion. For the labour market in particular, caste often operates through informal networks, referrals, and reputational hierarchies rather than formal channels. If policy designs fail to account for these social structures, labour market inequalities rooted in caste may remain unchanged despite these corrective measures.
3.7 Regional Politics of Reservations:
Various works for literature have pointed out that reservations cannot be understood through a single national framework. Whereas, their meaning and impact has been substantially shaped due to regional political differences, caste dynamics and state level strategies. This variation reinforces that idea that affirmative action operates with differentiated political economies rather than a uniform institutional framework.
Narayan (2014) analyses the demand for caste reclassification in Uttar Pradesh and shows how reservation categories themselves become a medium for political debate. Writing on the movement of certain Other Backward Classes (OBC’s) seeking inclusion within the Scheduled Caste category, as well as some Scheduled Castes demanding Scheduled Tribe status, Narayan shows that reservations in Uttar Pradesh have become intertwined with electoral politics, as various caste groups seek reclassification in order to receive better access state resources and political representation (Narayan, 2014). He argues that numerically smaller castes often feel “the benefits of reservations have passed them by,” further highlighting how access to quotas is uneven even within legally defined categories (Narayan, 2014). Hence, in this context reclassification becomes a tool for securing political access and state resources, rather than a claim merely rooted in historical deprivation.
Veeresha (2022) similarly points to the extension of reservation claims by socially influential and dominant castes across other Indian states. He argues that such demands not only reflect greater political representation but also growing economic insecurity among youth, especially from dominant communities facing shrinking economic opportunities (Veeresha, 2022). He says that the extension of the reservation benefits without a clear criteria, conflicts with the original objective of advancing those “at the bottom of the socio political order” (Veeresha, 2022). With this line of argumentation, regional politics shapes who gains access to affirmative action and who remains marginal within them.
These regional debates have a direct impact on labour inequality. The effectiveness of reservations in addressing employment disparities is dependent on how these categories are defined, which groups are politically organised, and how different state governments negotiate demands for reclassification. States including Kerala, Uttar Pradesh, and Maharashtra differ significantly in caste composition, party competition, literacy rates, and welfare infrastructure. National averages hence might not be the most accurate framework of measuring localised patterns of inclusion and exclusion. Understanding these variations highlight the importance of recognising how caste and labour market outcomes interact across different states in India.
3.8 Gaps in the Literature and Positioning of this Thesis:
Pre-existing literature on caste and affirmative action in India is extensive as well as theoretically rich. A large body of work documents the persistence of caste-based labour market inequality, showing how exclusion practice continues to operate through both formal and informal channels. This can be seen in the form of hiring discrimination, wage gaps, and occupational segregation (Thorat and Newman, 2007). Affirmative action policies in the form of reservations has been used as a form of corrective state intervention, but faces limitations in both its redistributive logic as well as institutional capacity (Dushkin, 1967). More recent work also complicates this by examining political and discursive debate regarding quotas, showing how demands for regional reclassification and ideological shift towards an income based criteria reshapes the public discourse regarding affirmative action (Narayan, 2014; Hegade and Andalgavkarkulkarni, 2025).
Despite this, several gaps still exist. Research on labour markets often looks at economic outcomes in isolation, without fully acknowledging the political context in which reservation policies are shaped and implemented. At the same time, much of the work on reservation politics tends to focus on representation without directly linking these processes to measurable labour market outcomes. Regional variation is also frequently acknowledged, but not always connected clearly enough to patterns of employment and mobility at the state level. This creates a understanding, where discrimination and policy design are often viewed separately rather than as interconnected processes that together shape labour market inequality.
This thesis seeks to bridge these gaps. Looking at labour market data along with policy analysis and regional political context, reservations are evaluated not solely in terms of numerical representation but also in relation to substantive economic outcomes. In doing so, caste is not merely treated as a residual cultural identity, but rather as an ongoing economic institution that still plays a substantial role in structural access to opportunities. Placing labour market inequality within its political and institutional environment facilitates a more grounded assessment of what the reservation policies actually achieve and where they fall short, as well as how their effects vary across different state contexts. This approach follows the foundation for the empirical as well as theoretical chapters that follow.
4. Research and Methodology:
Through this section, I will be examining how caste continues to shape labour market outcomes in India despite post-independence efforts. These reforms laid out by the Indian constitution use affirmative action as a mechanism to correct historical inequalities. I analyse reservation policies as a corrective mechanism that was aimed at addressing historical exclusion and establishing formal equality. I further look at caste continues to influence the labour market through occupational segregation, informalization, unequal return to education, and social devaluation of Dalit labour. My analysis also evaluates the measurable gains and constraints of reservations, stating that even though they have produced some form of equality but their outcomes remain partial. My goal is to show why caste still exists as a deeply rooted social structure by identifying the overall educational, economic, institutional, political, social reforms required for substantive equality.
For the purpose of reseach, I use both primary and secondary sources. A large part of my analysis is based on existing literature from sociology, economics, law, and political science, in order to understand caste-based labour inequality with its broader historical and institutional framework. Additionally, I look at qualitative primary data from interviews conducted as a part of the research, by providing crucial insights into the lived and structural aspects of caste, labour, and reservations. Quantitative research is also used from pre-existing empirical studies, by combining data on wages, income inequality, occupational segregation, and employment access to further support the arguments as part of this thesis.
5. Historical Background:
In order to fully understand why the caste system still operates in the modern day labour market it is essential to provide a broad definition and outline of the caste system and how it has historically functioned. The caste system in India has never merely been a religious system rather it developed as a hierarchical structure that organised society on the basis of birth, status and occupation. It places individuals into fixed social groups with attached expectations and duties since they are born. The religious, economic, and cultural embedding of castes within the very fabric of society is one of the main reasons why this system has had such a long lasting effect on work and economic opportunities. The distinctions of the caste system not only categorize people socially but also determine what kinds of labour they are allowed to performs, what status and remunerations such labour occupations carry, and how society treats those who perform these caste-based work.
Traditionally, the Hindu society was divided into four Varnas. At the top were the Brahmins, often referred to as Pandits in contemporary language, who were associated with priesthood, learning, and religious authority. Below them were the Kshatriya, who were linked to warfare, protection and rulership. The third category were the Vaishyas, associated with trade, agriculture and business. The Shudras were the fourth varna and were expected to perform various forms of service and labour for the upper castes. Outside the Varna system altogether were those who came to be known as the Dalits, historically treated as “untouchables” and assigned forms of labour considered impure and polluting by the caste-based society. This system in practice is extremely complex and consists of numerous “Jatis” or birth based sub castes, each with their own place in the social and occupational hierarchy.
It is important to note that the caste system was historically tied to occupational status from the outset. Work has not been freely chosen but rather largely inherited. Particular communities have been associated with certain kinds of labour and this separation has become more and more naturalised over generations. Priestly functions, artisanal work, trade, agricultural labour, leather work, sanitation work and other occupations have all become attached to a certain caste status. Hence, caste-based labour segregation was present even before the modern labour market came into existence. Different caste groups were not just characterized by the work they did but were also attached to a value in the society as a result of their caste status based on the work they do. Occupation, therefore, was never merely economic, it involved deep social, political and moral ties at the same time.
This can be demonstated with the example of manual scavenging. For centuries, this particular form of labour has been associated with the Dalit caste. It involved the manual cleaning of human waste and is one of the most stigmatized forms of work in Indian society. Historically, caste doesn’t just link impurity to the form of labour but also to the labourer, resulting in the social stigmatization and exclusion of the individuals and communities engaging in this form of labour itself. According to the data from the surveys done by the Ministry of Social Justice and Empowerment (2021), manual scavenging employs 58,098 workers with 42,594 belonging to the scheduled castes (SC’s), 421 to the scheduled tribes (ST’s) and 431 belonging to the other backward classes (OBC’s). This clearly shows that caste did not just divide labour, but also created a hierarchy of labour where the kind of work decides your status in society and how some work carried respect and dignity, while other work was subjected to humiliation and social exclusion. Thus, occupation and caste became inseparable, and the status of the work of a particular community is historically tied to and reflects the status in the modern society as well.
These caste-based roles were actively reproduced through various mechanisms, one of them being the existence of inherited work networks. Families and communities have historically passed down occupations, skills, and contacts internally. This has resulted in members of dominant and privileged castes to remain in power and in positions of authority such as trade, education, and religious institutions, while lower castes remain within the trap of stigmatized and poorly paid forms of labour. Societal hierarchies have reinforced this notion, with upper caste groups having greater access to education and institutions. These processes did not require active coercion because they have been normalised through everyday customs and expectations.
Endogamy was another socio-cultural mechanism which played an important role in reproudcing caste distinctions and hierarchies. The idea behind this was to marry into the same caste of which you are born into, in order to preserve social boundaries, status and occupational continuity. Hinduism as a religion has traditionally encouraged the practice of endogamy, as in the practice of marrying within the same Jati (Caste) as a means of preserving social structure, cultural identity and ritual purity. This resulted in limited social mobility and made caste identity hereditary not just in theory but also in everyday life. Further ensuring that caste remained stable across generations and helped maintain the power structure with those with access to power and those who were excluded from it.
Access to education and employment has always played a role in maintaining this power structure. Historically, upper caste groups have had greater access to literacy, formal education, and occupations with authority and greater social prestige. Lower castes, especially Dalits, on the other hand were often denied such access and have been confined to forms of labour that are physically demanding, financially insecure and socially demeaning. Looking at modern India, these inequalities continue to matter, even though legal equality has been formally established. Therefore, education and employment do not exist beyond caste-based history and are part of the broader structure through which caste-based privilege and disadvantages are actively reproduced.
As a whole, the caste system must be looked at not just as a socio-hierarchical system but rather as a system based on the historical structure of labour organization. These hierarchies were actively reproduced through birth-based occupational roles, the association of labour with status and stigma, and unequal access to networks, education, and opportunity. This historical background is crucial for understanding why caste still continues to influence the labour market outcomes in modern India today.
6. Independence and Post Independence caste-based efforts:
After the independence of the Indian State on 15th August, 1947, caste inequality was not no treated as a structure or condition that would automatically dissolve as a result of merely granting citizenship alone. The Indian constitution, significantly shaped by, among others,
Dr. B. R. Ambedkar, by recognizing caste as not just a part of the cultural history of India or by defining it as a matter of personal prejudice, but rather as a framework of a historical system that has built on structures defining dignity, status, labour, and access to institutions. The abolition of untouchability under Article 17 of the Indian constitution can hence be understood as a tool for attaining moral, political, social, and economic equality. It formed part of the broader post independence constitutional framework through which the Indian state aimed to correct deep rooted structural inequalities. Thus reservation policies were designed as a corrective framework, to intervene in a society where formal equality would be inherited through social and occupational hierarchies (Khosla and Mehta, 2025).
It is crucial to draw distinction between formal equality and structural inequality in order to understand caste-based politics in post independent India. The constitutional guarantee of equality did not emerge from a socially neutral society. It emerged as part of a system where caste already played a role in allocation of labour, social value and honour. Therefore, Ambedkar's constitutional equality would remain inadequate until institutional equality can also be achieved. The constitution achieved this through acknowledging certain groups that have been excluded not accidentally but also in a systematic manner. The relationship between caste-based discrimination and caste identity remains predominantly strong when it comes to Dalit population. Khosla and Mehta (2025) talk about how the identity of being a Dalit resulted in humiliation, exclusion and stigma.
The reservations introduced in fields such as education, public sector employment and legislature, acted as a primary framework through which the corrective vision of the constitution was put into operation by introducing reservations Scheduled Castes (SC’s) and Scheduled Tribes (ST’s). The aim was not only increasing representation but also to act as labour market interventions. Therefore, reservations looked at breaking the caste-based monopolisation of mobility producing institutions by altering the social composition of the Indian state (Kumar and Behera, 2025). Through the lens of argumentation presented by Dushkin, it becomes clear that in a deeply unequal society, imposing a legal structure of equality can result in further inequality (Dushkin, 1967). Dushkin argues that formal legal equality doesn’t by itself come from a neutral social standing. Dushkin’s argument is that law does not automatically guarantee equality in everyday life, especially in a society with a deep rooted historical structure of inequality. If the state treats the historically marginalized groups as if they are already equal, it risks preserving the inequalities that the state claims to remove. Thus, reservations were framed as measures not to act as an exception to justice, but to rather act as instruments of justice in newly independent equal society.
As a part of my research, I look at why the impact of the reservation policies remains inconsistent and limited, even though the affirmative action policies have been adopted as a part of the constitutional and legal frameworks of independent India. This can be explained in part by the fact that the caste system not just being an economic or political arrangement, but rather acting as a deeply rooted social order. Legal safeguards and economic access are important to attain the new social order as set by the constitution, yet they do not automatically dissolve the everyday structure of hierarchy that has been set for centuries. In other words, the state policies intervened in the distributive lens of caste inequality, but their effect remained minimal when we look at the system’s social foundations. This suggests, caste inequality cannot be overcome solely by introducing increased political representation and economic redistribution alone. It also requires a social transformation in everyday society. Until this is achieved the constitutional reforms risks achieving inclusion at the legal level while missing the deeper social lens of exclusion.
This limitation can be particularly seen in the case of Dalits in the post independent society, while also acknowledging that there have undoubtedly been important gains. Reservation policies have improved Dalit access to education, legislatures, institutions, and public sector employment, providing both material as well as symbolic development (Kumar and Behera, 2025). Yet this has not resulted in complete economic equality, let alone social equality. Dalit representation remains concentrated in informal and lower paid forms of labour with caste-based discrimination still playing a role in shaping labour market outcomes beyond the public sector (Dushkin, 1967). Suggesting, legal equality of labour has not corresponded into a transformation of the social organization of the labour market. This proves that post independent reform produced a condition of partial inclusion; Dalits have entered institutions that they have historically been excluded from but still continue to face daily inequalities in the economic and socio-political structure due to caste-based power relations.
Another goal of my research is to examine how the meaning of caste has been transformed into a public policy discourse centred around economic criteria rather than looking at its deeply embedded socio-political connotation. Equating the caste system to pure economic conditions is conceptually misleading. It certainly holds a significant economic context but cannot just be reduced to poverty or material disadvantage alone. An individual belonging to the Dalit caste may be economically well off and might not face deprivation in terms of income, but their caste still shapes their position in society through factors such as social power, mobility, dignity, and legitimacy. Thus, economic advancement does not necessarily result in social equality. Hence, caste should be understood as a structure built on social power and not merely as a factor indicating economic backwardness.
This further reflects how the expansion of reservations, by including the Other Backward Classes (OBC’s) as part of the reservation policies through the Mandal Commission, modified the politics of affirmative action. According to Khosla and Mehta (2025) reservations were originally aimed at addressing on ground caste-based discrimination, as a corrective measure for communities that have suffered from historical exclusion and oppression. However, over the years, the focus of these policies has actively shifted towards a broader emphasis on social backwardness and representation, where disadvantage and under representation became a ground for claiming reservations, with cases having no direct link to caste-based discrimination (Khosla and Mehta, 2025). This shift came as a result of reducing historically specific forms of exclusion to better allocation of access across multiple caste groups. In my analysis, I build on this by suggesting that this shift risks the reinforcement of caste through a primarily distributive category. If caste is only understood through the lens of representation and economic deprivation, it loses its social meaning. The problem does not end with who gets a job or a university seat but also who is socially accepted, who still has limited mobility and who receives dignity not just through their labour but also as a human.
Dushkin’s (1967) points regarding how legal equality alone cannot be enough to dismantle a caste-based system where the social structures that reproduce exclusion remain unchanged. Khosla and Mehta (2025) also add to this argument by showing that reservations become formalised when numerical representation is looked upon as sufficient justice, while not acknowledging the social factors continue to play a role in shaping status and labour market outcomes. As a whole, it can be seen how the Indian state tried to break the caste structure by introducing reservations and legal reforms, and how they reshaped labour and institutions. Yet, they did not result in a full social transformation of the society. Therefore, the analytical claims remain; the post independence reforms changed the legal framework but their effect on the legal structure remained minimal. Hence, even though legal equality has been achieved through economic means, it still remains insufficient as long as caste continues to shape social value and mobility.
7. Caste and Labour Market in Modern India:
In contemporary India, the correlation between caste and labour market remains structural rather than as incidental. Through my analysis, I look at how caste is not just merely a historical structure but also continues to function as an active form of labour market allocation and exclusion. Caste plays a role in how labour markets sort workers into various categories of labour, how their work is socially valued, what working conditions they receive as well as how their skill is rewarded. Thus, the issue is not just that lower caste individuals enter the market without fewer resources but are rather forced into a structure that does not allow them to grow further and advance in their respective fields of work. Further reflecting the claim of how labour markets in India are not socially neutral spaces and are embedded with deep-rooted structures of hierarchy based on caste power dynamics and social exclusion (Thorat and Newman, 2007).
A clear quantitative evidence of this comes from the World Bank study by Maitrey Bordia Das (2008). By using data from the 61st round of the National Sample Survey, Das uses multinomial logistic regression to analyse the men’s labour allocation across different sectors of work. These included salaried work, non-farm work, self-employment, self-employed farming, casual labour, and labour force exit. By distinguishing between these categories, Das shows that caste inequality operates not only through exclusion from work, but also through the unequal concentration of Dalit men in more insecure and lower-status forms of labour. This is relevant in this context as it sheds light on what kind of work are Dalits put into as a part of the labour market. The findings of the research are significant. The results indicate, in urban areas Dalit men are around 12 percentage points less likely to be employed in non-farm self-employment compared to non-Dalit men, while in rural areas Dalit men are 25 percentage points more likely to be employed as casual labourer (Das, 2008). Furthermore, Das’s predicted probability figures show a correlation between caste and allocation within the labour market across different hierarchical groups rather than at a single point of exclusion. Whereas in rural areas, the probability figures for Dalit men face show, less likelihood of being employed in non-farm self-employment (0.15 versus 0.21) and self-employed farming (0.19 vs 0.37), with the probability of engaging in casual labour increasing from 0.28 to 0.52. In Urban areas, men from the scheduled caste remain less concentrated in non-farm self-employment (0.27 versus 0.39) and are more likely to work in the casual sector or outside the work force (0.33 versus 0.19).
Das (2008) explains this pattern through the concept of “glass ceiling” or as a system of rationing in formal employment. This refers to Dalit men receiving limited access to lower-end salaried jobs, but still remain restricted to higher-status positions or independent self-employment opportunities. This may be linked to reservation policies. As a whole, the results from this research show how caste-based inequality is not just reproduced by exclusion from work, but also through a carefully crafted and limited form of inclusion. This is suggesting a pattern of direct caste-based influence on the labour market allocations, with Dalit workers having disproportionate overrepresentation in rather insecure and lower-status forms of work. These findings of caste-based labour market patterns or trends support my overall argument that lower-caste workers remain concentrated in informal and precarious forms of labour. Das (2008) through her analysis shows, when Dalit men are unable to access regular salaried work, they do not move into self-employment, but are rather pushed into casual labour or are forced out of the work force. As a whole, caste disadvantage is not just reproduced by multiple blocked channels rather than one isolated form of exclusion.
Furthermore, this quantitative result is reinforced by my interview with Roby Ranjan, who says that reservations have improved access to a selected segment of public employment and education, although their reach remains minimal to many living in an economy where work is mostly dominated in the private sector (Rajan, 2026). Roby Rajan is a professor of Quantitative Methods in the Department of Business at the University of Wisconsin-Parkside and has had multiple years of research experience regarding the Indian Caste system. He says “reservations have been important to establish formal equality for those who have been historically marginalized, but their impact remains inconsistent with what the constitution aimed at doing” (Rajan, 2026). According to me, the concentration of Dalit worked in informal labour is not accidental. It shows the limitations of the reservation system and how a policy aimed at transforming the labour market remains inconsistent.
Another strong claim from Das’s analysis is that is shows education does not eradicate caste penalties. An important finding in her paper is that Dalit men with post primary education receive lower returns to education in the form of formal employment compared to other men (Das, 2008). This is crucial at it shows how caste disadvantage cannot just be reduced to human capital. Even when Dalit workers acquire education, the labour market doesn’t reward these qualifications the same way as they do for upper-caste individuals. In my view, this is one of the strongest indicators of how caste operates not only before entering the labour market but also through unequal access to education. This results in differential conversions of credentials into opportunities.
The issue, however, is not only limited to allocation but also to status. Roby Rajan links Dalit labour disadvantage to historical devaluation of certain occupations such as leather work and manual scavenging that are viewed as “dirty”. This shows caste not only shapes who performs certain types of work, but also how that work is socially perceived (Rajan, 2026). As a part of my research I also had the opportunity to interview Jyoti Nisha, a filmmaker and academic who works closely with the caste system as an activist for lower-class rights, especially Dalits. Jyoti Nisha adds to this argument by “Dalit work is often undervalued and treated as worth less” (Nisha, 22nd February, 2026), highlighting the relationship between caste and unequal valuation of labour. She explains this by saying that in her experience, she has encountered cases where individuals with a Dalit last name have not been considered for a job due to their caste identity (Nisha, 22nd February, 2026). This is relevant as it shows that lower-caste workers remain concentrated in lower-status forms of labour not just because of poverty, but because caste-based hierarchies continue to organise labour through unequal structures.
Taken together, caste-based distinctions continue to influence labour market inequality by shaping both access to employment as well as the social value attached to that form of work. Along with Das’s research, Thorat and Newan (2007) and Sabri (2023) review of Thorat, Madheswaran, and Vani’s work also proves lower employment probability, occupational segregation, wage discrimination, and poverty reduction among scheduled castes. My argument here remains that legal equality has produced meaningful but limited opportunities. Substantive labour equality remains incomplete because caste continues to dominate occupational devaluation and social recognition beyond the formal institutions where legal safeguards apply.
8. Reservation Policy, Affirmative Action, and Limits of Formal Equality in India:
Reservation policies were crucial to the post-independence attempt to establish formal equality in a society historically and deeply structured by caste hierarchy and inequality. They are crucial not just because they introduced quotas, but also played a role in the recognition of caste as a historically produced form of exclusion whose immediate and long-term alleviation required direct state intervention. The diverse reservation policies in educational institutions, public employment sectors, and political legislature aimed to break upper-caste monopolisation of institutions and create access for those who had long been denied it. Hence, reservations were framed not as a charity or temporary favouritism, but as a corrective response to historically embedded inequality (Dushkin, 1967; Kumar & Behera, 2025). Roby Rajan’s interview supports this claim by saying that, without these constitutional safeguards, the upper castes would have been likely to dominate state institutions entirely (Rajan, 2026).
The evidence from quantitative research show that reservations did generate real gains. Boorah, Dubey, and Iyer (2007) conclude that job reservation increased Scheduled Caste and Scheduled Tribe representation in regular salaried and wage employment by 5 percentage points, providing a clear empirical evidence of the reservation policies on the labour market. This proves to be a significant finding as it shows that the effect of affirmative action is not just symbolic, but has rather redefined access various sections of employment. Reservations have also existed beyond the sphere of employment and their impact can be seen through political reservations as well. Anderson and François (2023) through their research show how reserving some leadership positions for individuals belonging to disadvantaged groups in some villages in Maharashtra has has had a positive effect on the quality of governance, making it clear on how these policies have produced institutional benefits beyond representation. As a whole, these studies support my claim of how reservations has been greatly beneficial in opening up spaces that have historically been inaccessible to various groups of the Indian society.
At the same time, data also shows how the reservations policies, on their own, have not been sufficient to produce substantive equality. Descriptive data by Boorah, Dubey, Iyer (2007), further shows the representation among prime-age men, upper caste Hindus had 31.55% in regular salaried jobs, comparing to 18.07% for Scheduled Castes and 12.54% for non-Christian Scheduled Tribes. Scheduled Castes remain heavily concentrated in casual wage labour at 47.18%, compared to 10.23% for upper-caste Hindus. A massive difference in education can also be seen through the data that they have presented. 42.93 % of Scheduled caste men were illiterate, compared to 10.04 % for upper caste Hindu men (Boorah, Dubey, Iyer, 2007). The decomposition analysis become crucial here as it shows whether the employment gap is driven for weaker education opportunities and labour market conditions or due to characteristics that valued differently between various caste groups (Boorah, Dubey, Iyer, 2007). The data from this study clearly shows that even though reservations have improved access to protected jobs, their impact is not to the extend originally hoped for. Potential causes for this could include generations of educational deprivation and social exclusion that the policies were unable to compensate for.
Examining the qualitative data also looks at how the reservation policies have improved employment access, but not to the extend that they were originally aimed at. My interview with Roby Rajan becomes interesting to look at here. He expands on this by saying “ reservation’s measurable gains remain structurally narrow” (Rajan, 2026). He argues that reservation does create protection mechanisms but they end up reaching a limited part of the Indian population. Majority of the labour lies in the private sector, where reservation has limited influence and caste continues to dominate through hiring preferences, endogamous networks, social partialty, and assumptions about merit (Rajan, 2026). This reiterates my points regarding active forms of caste-based exclusion in the Indian labour market. Further showing, how labour is allocated and valued. Ranjan also draws a link between historical stigmatisation of certain professions such as leather work or manual scavenging, indicating that reservations cannot undo the deep rooted cultural understanding of certain types of labour as “impure” or “dirty” (Rajan, 2026).
My interview with Jyoti Nisha adds to this argument by showing how reservation address access more efficiently than factors such as dignity and social equality (Nisha, 2026). She says even when Dalits enter institutions, they are still face undervaluation and exclusion. Being a filmmaker herself, she reflects on how upper-caste clients have tried to purchase her services for “despicably low” prices. Further, pointing out that caste shapes not only who gets hired, but also how much their labour is worth (Nisha, 2026). Her overall claim is that formal equality defined due to the frameworks laid by the Indian constitution have not directly translated into social democracy, as caste remains a structure shaping legitimacy and institutional treatment. This directly supports the claim by Thorat and Newman (2007) stating that caste discrimination is actively reproduced in economic life through social exclusion and unequal access to opportunities instead of dissolving with economic development.
Thus, these arguments show how reservations have necessary and beneficial, but their capacity remains uneven and limited. They have a direct impact on the economic and political aspects regarding caste but keep the social domain largely unaddressed. Hence, a stronger framework for equality would require better implementation along with educational and social reforms.
This limitation becomes clearer when read alongside the qualitative material. Roby Rajan’s interview helps explain why reservation’s measurable gains remain structurally narrow. His argument is that reservation creates genuine protections in public employment and education, but these protections reach only a small part of Indian social life. Much of the labour market lies in the private and informal sectors, where reservation has little force and caste continues to operate through hiring preferences, endogamous networks, and assumptions about merit (Rajan, 2026). His account is especially valuable because it shows that caste inequality is not simply about exclusion from work, but about how labour is allocated and valued. He further links Dalit disadvantage to the ritual devaluation of historically stigmatised occupations such as leather work and manual scavenging, indicating that reservation does not undo the deeper cultural coding of some labour as impure or degrading.
Jyoti Nisha’s interview extends this argument by showing that reservation addresses access more effectively than it addresses dignity, belonging, and social equality. Her reflections suggest that even when Dalits gain entry into institutions, they may still encounter undervaluation, hostility, and exclusion. Her observation that upper-caste clients have attempted to purchase her services for “despicably low” amounts is analytically important because it shows that caste shapes not only who gets work, but what Dalit labour is assumed to be worth (Nisha, 2026). Her wider claim is that constitutional equality has not translated into social democracy, because caste remains a structure of power shaping respect, legitimacy, and institutional treatment. This is consistent with Thorat and Newman’s (2007) argument that caste discrimination persists in economic life through social exclusion and unequal access to opportunity rather than disappearing automatically with market modernisation.
Taken together, these arguments suggest that reservations have been necessary and measurably beneficial, but their transformative capacity has remained limited. They intervene most directly in the economic and political domains of caste while leaving its social foundations only partially challenged. A stronger framework for equality would therefore require not the abandonment of reservation, but its more effective implementation alongside broader educational, anti-discrimination, and social reforms
9. Why Caste-Based Inequality still exists and the way forward:
The existence of caste-based inequality in contemporary Indian society is not just an economic or legal, but a deeply embedded social order that continues to structure the markers of dignity, status, labour and belonging. The post independent Indian government developed a constitutional framework that abolished untouchability and introduced reservations, but their impacts did not completely dissolve the social foundations laid by the caste system. The research from Khosla and Mehta (2025) shows how reservations address backwardness and representation, but have not necessarily reduced caste-based discrimination itself. Furthermore, Throat and Newman (2007) address caste through the lens of social exclusion, and how it contributes to shaping access to opportunities through both active and passive forms of discrimination. My qualitative research adds to this argument. Roby Rajan (2026) speaks about how caste remains socially omnipresent even when not named, while Jyoti Nisha (2026) argues that constitutional equality has directly translated into social democracy as the caste-based structures still dominate power and respect in everyday life.
This is why it could be argued that, on their own, the caste reservations have not been sufficient measures to eradicate longstanding discriminatory structures and processes. Although, they have been necessary and measurable, the impact they have had on the society as a whole has been partial. Borooah, Dubey, and Iyer (2007) how in their study that how reservations have increased Scheduled Caste and Scheduled Tribe access to salaried employment by five percentage points, indicating the positive effects of reservations. However, the same study also shows upper-caste Hindu remain substantially more concentrated in regular salaried work, while Scheduled Caste dominate representation in causal forms of labour. Das (2008) similarly argues that Dalit men remain overrepresented in casual labour and underrepresented in non-farm self-employment, suggesting the limits of mobility in various labour market networks. The qualitative data also points to this. Rajan (2026) reflects on the limited reach of the reservations in an economy primarily dominated by private and informal work. Nisha (2026) adds to this by saying that entry into institutions does not guarantee dignity or social equality. Therefore, the problem is not the existence of reservations, but the fact its impacts remain limited.
The way forward must involve the expansion of opportunities beyond the limited sectors where reservation operates. This would mean that policies should go beyond reservation alone and increase access to secure public sector employment and education across regions and the public sector. Kumar and Behera (2025) become relevant here, with their argument that affirmative action should be maintained and enforced in a more effective manner, rather than just replacing it with a simple economic criteria. Opportunities must be expanded both into higher-status jobs as well as across sectors that have been historically inaccessible.
Education acts as an equally important tool for achieving this. Research by Borooah, Dubey, and Iyer (2007) shows how a majority of the employment gap is driven by weaker access to education. Thus, proving why primary and secondary education is extremely crucial for historically oppressed communities. State intervention cannot just be implemented on a university or public-sector employment level; it must begin earlier. Therefore, educational reform is not an alternative to reservation, but is rather a prerequisite to make the policies more efficient.
Ultimately, the deepest change required is social, because caste continues to be reproduced due to endogamy, stigma, unequal social valuation of labour, and historical hierarchies of dignity and belonging that legal and economic reforms alone cannot tackle. Caste-based allocations of labour and dignity should also re-evaluated. Rajan (2026) links Dalit disadvantage to ritual devaluation of caste-marked occupations, while Nisha (2026) says that Dalit labour continues to be undervalued in everyday interactions. Therefore, the way forward must include active introduction of anti-discriminatory enforcement, institutional accountability, more equal representation in positions of power, and reforms that weaken structures that promote exclusionary patterns, stigma. The existence of caste-based inequality in contemporary India reveals the challenges not just to expand legal equality but also to dismantle the social structures that actively reproduce them in everyday life.
10. Conclusion:
Through this thesis I look at how the historical and contemporary Indian Caste system has continued to influence labour market inequality, and to what extent have reservation policies translated into meaningful improvements in employment access and representation for Dalits. The overall conclusion of the thesis is that caste continues to play a role in labour market outcomes in India in significant and measurable ways, and even though reservation policies have been beneficial in creating opportunities, they are still not sufficient to undo the deep rooted social structure of the caste system.
The quantitative research as a part of this thesis supports the claim that caste remains a significant determinant of labour market outcomes. Dalits continue to be disproportionately concentrated in informal, and lower-paid forms of work, while upper caste groups remain strongly represented in salaried and higher status jobs, as shown in various empirical studies. Wage disparities exist, even when education and qualifications are considered, reflecting that labour market inequality is not just based on difference in skill levels or human capital. Data from the research also shows how caste shapes education into real employment opportunities, reflecting that same credentials do not automatically result in same returns across the caste-based divisions. Hence, caste-based inequality does not just function before entering the labour market, but also within the labour market allocation as well.
The qualitative evidence adds to this argument. The interviews conducted for the purpose of this thesis elaborate on the idea of how caste operates through ways that go beyond formal exclusion. Labour disadvantage is reproduced through stigma, social networks, hiring preferences, and social devaluation of historically stigmatized forms of work. The prove that caste-based inequality cannot be looked at only from the perspective of wage disparities or unequal employment categories, it also takes into account dignity and social value attached to labour itself. The interviews, hence, support a strong argument from this thesis: caste is not just an economic category, but rather is a deeply rooted social phenomenon that continues to play in role in organisation of power, social value, recognition, and opportunity.
The second conclusion of this thesis is that caste-based structures still exist not due to India lacking constitutional equality, but because formal equality alone dismantle a system that historically embedded in everyday social dynamics. The problem is not limited to lower-caste individuals receiving lesser economic opportunities, but how caste continues to play a role in how they are perceived by society and what kind of work they are considered fit for. Economic mobility does not automatically get rid of the hierarchical structure of the Indian society, largely dominated by caste. A Dalit person could achieve educational or occupational advancement but may still have to face social stigma due to their caste identity. Hence, in this thesis, I argue that caste should be looked at not just from the lens of poverty or material deprivation, but a social structure that requires change in attitudes and access to education.
The third major conclusion of this thesis is about affirmative actions or in the Indian case reservation policies. Through this thesis, I have found that the impact of reservations has been beneficial and measurable in the expansion of formal equality within the Indian state. They have improved access to public education and Public employment, and have created pathways of mobility that were historically closed to certain communities. Hence, they have most definitely been crucial. However, their impact remains limited and inconsistent. This is due to the private sector dominating the labour market. Hence, reservation policies by themselves cannot transform the redistribution of labour and wages. Furthermore, even in cases when access has been improved, caste-based stigma and exclusionary practices still exist.
Taken as a whole, through this thesis I look at how caste remains to be a strong indicator of labour market inequality in contemporary, in spite of the Indian constitution guaranteeing formal equality and decades of affirmative action policies being in place. Reservations have been necessary and measurable in improving access across the lines of public education and employment for various historically excluded communities, especially Dalits. However, their effects remain partial due to them working only in the formal and public sphere of the society. Caste-based inequality continues to be reproduced through informal labour, unequal educational access, social stigma, exclusionary practices, as well as social devaluation of caste marked labour. Hence, the main conclusion remains, caste-based disadvantages exist not because legal equality is not present, but due to the limitations of formal equality to abolish a deeply rooted unequal social order. If substantive equality is to be achieved, reservation policies should be improved rather than abandoned, but should also come with educational, political, social, institutional reforms that challenge the structure by which caste continues to dominate opportunity and dignity.
11. Bibliography:
Ambedkar, B. R. (1936). Annihilation of caste.
Anderson, S., & François, P. (2023). Reservations and the politics of fear. Journal of Public Economics, 225, 104963. https://doi.org/10.1016/j.jpubeco.2023.104963
Borooah, V. K., Dubey, A., & Iyer, S. (2007). The effectiveness of jobs reservation: Caste, religion and economic status in India. Development and Change, 38(3), 423–445.
Das, M. B. (2008). Minority status and labor market outcomes: Does India have minority enclaves? (Policy Research Working Paper No. 4653). World Bank.
Department of Social Justice and Empowerment, Ministry of Social Justice and Empowerment, Government of India. (2022). Annual report 2021–22. Government of India.
Dushkin, L. (1967). Scheduled caste policy in India: History, problems, prospects. Asian Survey, 7(9), 626–636.
Governance and Social Development Resource Centre. (n.d.). Urban labour market discrimination. Retrieved April 10, 2026, from https://gsdrc.org/document-library/urban-labour-market-discrimination/
Gupta, T. (2025). Evolution of reservation system in India: Contemporary discourse and debates. International Journal of Social Science Research and Review, 8(12), 41–68. https://doi.org/10.47814/ijssrr.v8i12.3007
Hegade, S., & Andalgavkarkulkarni, Y. (2025). The paradox of solidarity in higher education: Caste, gender, and the affirmative action conundrum. International Journal of Educational Development, 117, 103324. https://doi.org/10.1016/j.ijedudev.2025.103324
Hussian, M., Wani, S. A., & Bole, D. (2022). Dividing equality destroying affirmative justice: Assessing economically weaker sections (EWS) reservation in India. Shimla Law Review, 5, 236–252. https://doi.org/10.70556/hpnlu-slr-v5-I1-2022-11
Khosla, M., & Mehta, P. B. (2025). Caste formalism: The law and politics of equality in India. Law and Contemporary Problems, 87(3), 205–289.
Kumar, G., & Behera, M. (2025). Affirmative action in New India: Evaluation of caste-based reservation policy and debate around economic criteria. Social Change, 55(1), 7–22. https://doi.org/10.1177/00490857241303332
Narayan, B. (2014). The politics of reservation categories in Uttar Pradesh. Economic and Political Weekly, 49(5), 18–20.
Nath, B. K., & Parakandathil, R. P. K. (2015). Scheduled Castes and Scheduled Tribes in India and their higher education.
Nisha, J. (2026, February 24). Interview by K. K. Dutta.
Paramesh, M., & Kavitha, R. (2024). Empowering the workforce: Dr. B.R. Ambedkar’s labor reform for liberation and welfare. International Journal for Multidisciplinary Research, 6(3), Article IJFMR240323160.
Rajan, R. (2026, February 24). Interview by K. K. Dutta.
Sabri, T. A. (2023). Scheduled Castes in the Indian labour market: Employment discrimination and its impact on poverty. CASTE: A Global Journal on Social Exclusion, 4(2), 469–472. https://doi.org/10.26812/caste.v4i2.704
Sen, A. (2000). Social exclusion: Concept, application, and scrutiny (Social Development Papers No. 1). Asian Development Bank.
Senger, P., & Matsaniya, V. S. (2025). The moral economy of labour: Revisiting Ambedkar’s blueprint for equity and inclusion. Shodhpatra: International Journal of Science and Humanities, 2(10), 147–158. https://doi.org/10.70558/SPIJSH.2025.v2.i10.45373
Thorat, S., Attewell, P., & Rizvi, F. F. (2009). Urban labour market discrimination. Indian Institute of Dalit Studies.
Thorat, S., Madheswaran, S., & Vani, B. P. (2023). Scheduled Castes in the Indian labour market: Employment discrimination and its impact on poverty. Oxford University Press.
Thorat, S., & Newman, K. S. (2007). Caste and economic discrimination: Causes, consequences and remedies. Economic and Political Weekly, 42(41), 4121–4124.
University of Wisconsin–Parkside. (n.d.). Rajan, Roby, PhD. Retrieved April 10, 2026, from https://www.uwp.edu/learn/instructorprofiles/facultystaffdetail.cfm?uid=rajan&emeritus=1
Veeresha, N. (2022). Politics of reservation: Implications for social justice. Indian Journal of Human Development, 16(2), 385–389. https://doi.org/10.1177/09737030221120475
