The incidence of affirmative action: Evidence from quotas in private schools in India; Professor Abhijeet SINGH (Stockholm School of Economics)

(written jointly with Mauricio Romero)

Abstract

This paper studies the effects of India’s primary school-integration policy — a 25% quota in private schools for disadvantaged students, whose fees are reimbursed by the state — on direct beneficiaries, and the incidence of these benefits. We combine survey and administrative data from the state of Chhattisgarh and, using the lottery-based allocation of seats, show that receiving a quota seat makes students more likely to attend a private school, attend schools which are more expensive, more preferred by parents, and more likely to offer English-medium instruction. Within eligible caste groups, however, quota applicants are drawn disproportionately from more-educated and economically better-off households, and three-quarters of the applicants who lost the lottery also attended a private school as fee-paying students. Consequently, about 67% of the total expenditure per quota seat is inframarginal for school choice. Using rich survey data on parental preferences and subjective expectations, and a follow-up randomized intervention to provide application support, we find that low application rates by poor households are not primarily explained by  a lack of demand or spatial segregation. Rather, information constraints, application frictions, and the lack of documentation appear central. Fully addressing regressive selection would require simultaneously solving these multiple frictions.