NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

While inequality in outcomes (consumption or income) in South Asia is moderate (with Gini coefficients ranging between 0.3 and 0.4), South Asia ranks among the least intergenerationally mobile regions in the world. For example, in South Asia, educational achievement is heavily dependent on the education of one’s parents: less than 9 percent of individuals whose parents’ education level was in the bottom half of the population reach levels of education of the highest educated 25 percent. These ‘sticky’ disparities in education translate into disparities in incomes and are extremely difficult to reduce.

More generally, South Asia is one of the regions with the largest inequality of opportunity. Inequality of opportunity refers to inequality that is due to circumstances out of the control of the individual. Social progress for South Asians is not only heavily dependent on parental background, but also on other circumstances such as gender, race, caste, or place of birth.

More than two decades of sustained economic growth across most of South Asia brought significant poverty reduction but inclusive social progress has remained elusive. In fact, high inequality of opportunity (and correspondingly low social mobility) can become a drag on future growth and jeopardize the achievement of development goals and eradication of poverty in the South Asia region. Inequality of opportunity is more detrimental to growth and societal cohesion than inequality of outcomes (Ferreira et al 2018, Marrero and Rodriguez, 2013, Narayan et al, 2018, Bussolo et al, 2019). In societies with low equality of opportunity, talented individuals may not reach their full potential because they are constrained by circumstances rather than by their lack of effort. To the extent that inequality in opportunity can be remediated, this may lead to greater equity, social cohesion, political stability and growth.

In addition to objective inequality, perceptions or subjective measures of inequality are also important because of their implications for redistributive policies (Bénabou & Tirole, 2006, Gimpelson and Treisman, 2018). As in other parts of the world, perceptions of worsening inequality have been on the rise, even in cases where objective inequality has been stable or decreasing and, correspondingly, demands for corrective action have been increasing. For example, between 2006 and 2012 in India the share of people reporting that incomes should be more equally distributed increased from 33 to 48 percent, according to the World Value Survey data. Rather than misperceiving inequality, subjective views are likely encompassing a broader definition of inequality that correlates not only with objective inequality, but also with poverty and insecurity, as well as with fairness and social mobility, own individual or household situation, and ideology.

Against this backdrop, the World Bank, BRAC Institute of Governance and Development (BIGD) and the South Asia Economic Policy Network invite papers addressing one of the following (or related) questions:

• What factors drive intergenerational mobility and equality of opportunity in the South Asia region?
• What is the role of social structures such as caste systems, ethnicity, gender, and religious divisions in overall inequality in South Asia?
• What type of public policies and interventions can remove obstacles to intergenerational mobility and thereby promote equality of opportunity across individuals?
• What is the role of social movements/democratic civil society in generating evidence and raising voices?