Traditional slavery institutions and democratization: Insights into intercaste human capital disparities in Sumba Island’s rural areas, Indonesia

This study aims to bridge the gap in the existing literature by examining the impact of prevailing traditional slavery institutions and democratization processes on human capital development. In our pursuit, we conducted a residential survey in Sumba Island, Indonesia. Notably, despite democratization efforts since the 1950s, the traditional slavery institution, deeply entrenched in the ancient Austronesian ranking system, remains prevalent. This system classifies individuals into three hereditary tiers: nobles, commoners, and slaves. Based on the premise that caste designation is random and exogenous, we utilized an ordinary least squares (OLS) estimation approach, incorporating natal clan and cohort fixed effects. Our findings underscore the distinct advantage in human capital that individuals of the noble rank hold over their counterparts in the lower ranks, i.e. commoners and slaves. However, we also highlight the promise of ongoing democratization in bridging the human capital gaps between nobles and slaves, while simultaneously enhancing the potential for commoners to improve their human capital outcomes.