Jati As A Communities Of Mutual Support

A post at the economics blog Marginal Revolution (original source in the link) sheds some light on the social role of jati in India which is important to understanding the institution, even though this is looking only at its modern manifestation (emphasis added):

[T]he real wage gap [rural to urban] in India is at least 16 percentage points larger than it is in China and Indonesia. There is evidently some friction that prevents rural Indian workers from taking advantage of more remunerative job opportunities in the city.

Indian migration to the cities is much lower than for China or Indonesia. Here is part of the answer:

The explanation that we propose for India’s low mobility is based on a combination of well-functioning rural insurance networks and the absence of formal insurance, which includes government safety nets and private credit.

…In rural India, informal insurance networks are organized along caste lines. The basic marriage rule in India (which recent genetic evidence indicates has been binding for nearly two thousand years) is that no individual is permitted to marry outside the sub-caste or jati (for expositional convenience, we use the term caste interchangeably with sub-caste). Frequent social interactions and close ties within the caste, which consists of thousands of households clustered in widely dispersed villages, support very connected and exceptionally extensive insurance networks.

Households with members who have migrated to the city will have reduced access to rural caste networks…

Analogies

The analogy that comes to mind is that the jati served some of the functional roles of religious denominations (particularly Roman Catholics and Mormons) and political party machines in American history, and the Tong (a.k.a. "Benevolent Association") in Chinese immigration history.  Koreans have something more ephemeral, but analogous, where a group of a dozen or two people meet regularly to pool monthly savings to allow one of them to have start up capital for businesses, rotating each meeting.

Even more apt analogies may be to medieval guilds and professions, and to unions organized on an industry level such as the Actor's Equity Association and the Screen Actor's Guild.  The latter, because the industries are "gig based" with each production organized as a separate firm, have historically provided a central clearinghouse of job opportunities as well as many of the fringe benefits like health insurance and retirement vehicles that would be secured from an employer during the era when lifetime employment with a single firm was the norm.

Imagine the India in which these institutions came into place, as one in which all professions and occupations worth the name were unionized and only people engaged in work so unskilled and menial that its people did not unionize and were instead atomized in society became the Dalits, a path which at one point the U.S. economy was headed towards, but ultimately veered away from as private sector unionization has slowly faded away, but remains alive and well in places like Germany where even being a waiter is a regulated profession.

Needless to say, what distinguishes jati from these Western institutions is the strong tradition of endogamy at the fine grained level of Indian jati, while the West's traditions of endogamy were weaker and at the more general level of social class (roughly as course grained as Indian varna).  But, in many other respects the analogy is quite strong.

Adding a kinship dimension to jati as well as a professional one, may have allowed this institution of Indian civil society to hold fast, in the face of a weak state that did not have the capacity to enforce binding long term mutual support obligations or to organize a welfare state of its own as many of the Bronze Age and Iron Age states of West Eurasia did in "bread and circus" systems of palace/state based taxation and food rationing that emerged throughout the Mediterranean.

The kinship element can be seen as analogous to the kinship but not professionally based clans common in societies with cultures of honor, often with herding economies.

In contrast, in China, rice farming estate were largely required to support themselves and share excess with the state, without substantial social welfare food assistance outside the rice farming estate, creating incentives for rice farming groups to produce so they would not starve.

Thus, the Indian caste system can be seen as a civil society based tool that facilitated an economy more complex than that of feudal estates in Medieval Europe or clan based herder societies, that was more akin to Europe's "free cities", even in the absence of the strong state institutions or compact walled cities, that would otherwise be necessary to organize such an economy.