[Reader-list] The Truth About Reservations

Shivam Vij शिवम् विज् mail at shivamvij.com
Thu Jun 26 20:49:30 IST 2008

The passions that reservations incite amongst us, on both sides of the
divide, are surprisingly not reflected in any research or even journalism on
the impact of reservations. Given below is a report about a happy exception,
but much more work of this kind is required. The full paper which this
report summarises is available at: http://www.nber.org/papers/w13926

If you are a hardened anti-reservationist, please don't read any further,
it's not going to help your shock of the Supreme Court giving a go-ahead to
"Mandal II".


o o o o

Social justice and its myths

Mihir Sharma
The Indian Express
Wednesday, June 25, 2008

Who benefits from reservations? And who loses out? A new study has some

No politically fraught issue has been debated without hard data for as long
as has the question of caste-based quotas in higher education. Very little
is known definitively about who actually wins and loses from the policy;
even the parameters around which the size of the quotas are based are almost
certainly outdated. In this vacuum, anecdotal evidence has combined with
political polemic to lead to a generally believed set of principles, which
are trotted out with monotonous regularity whenever required.

This is one commonly held belief: students benefiting from reservations are
frequently not good enough — or do not have the skills — to actually benefit
from the education they will receive. This 'mis-match' is, we are expected
to believe, not only a waste for the institutions forced to admit them and
to the individuals themselves, but to the economy as a whole. Twelve
students, recently expelled from IIT-Delhi, allege that they were told this
quite explicitly.

Consider, also, the marvellously evocative phrase 'creamy layer'. While the
phrase now has a legal meaning — the children of government employees above
a certain rank, or of households earning more than 2.5 lakh a year — its
centrality in discussion reflects the degree to which people are convinced
that those who benefit from reservation are 'rich' in some sense, and indeed
probably better-off than the candidates that they displace. Thus it is
implied that deserving candidates are frequently excluded for the dubious
social benefit provided by admitting candidates who are already, in economic
terms, privileged.

Fortunately, for the first time, these common assumptions — and others like
them — can be put to the test. This is thanks to a mammoth project
undertaken by a small group of economists: Marianne Bertand of Chicago, Rema
Hanna of New York University, and Sendhil Mullainathan of MIT. They spent
years gathering information about applicants for admission to engineering
colleges from an unnamed Indian state in 1996, focusing on those who just
made and those who just missed the admissions cutoff in each caste category
— general, SC and OBC. This required them to trawl through lists and
actually, physically, trace and interview those applicants and their
families — some of whom had moved several times since their last known
address was recorded.

What did their analysis of that information, now available online, reveal?
First of all, it is certainly true that successful SC and OBC applicants
have a family income higher than that of the average SC and OBC family in
their state. That much of the 'creamy layer' story is correct. Absolutely
everything else appears to be completely false. They find that exactly the
same thing is true of all SC/OBC applicants as a whole — not just the
successful ones — and, indeed, even of general quota applicants, who also
have family incomes above the average for their state and caste. So it is
not the case that relatively richer families benefit from quotas in
admission; only relatively richer families ever have children that sit for
admissions tests anyway. And it is definitely not the case that richer
lower-caste applicants are taking seats away from poorer general-category
students; when the economists compared "applicants offered a seat in an
engineering college in 1996 due to the reservation programme to those that
were refused a seat but would have been admitted in the absence of the
programme", they found that the family income of the former set was, on
average, less than 60 per cent of the family income of the latter group.

Secondly, the 'mis-match' theory isn't supported either. If it were true,
then just being admitted to an engineering college under a quota would not
mean that an applicant became a more productive worker. This wasn't the case
when that 'productivity increase' was measured in terms of the salary
increases that those individuals were able to command and hold down.

Those salary increases, while significant, were however not as much as the
salary increases an upper-caste candidate would expect if he happened to
make it through the engineering admissions test: this, at last, is partial
support for at least one of the standard stories, that the economy's overall
productivity is hurt by prioritising lower-caste applicants. The study's
authors, however, offer another explanation for this result: the choice of
job for SC/OBC engineers is distorted by the fact that they find it easier
to get stable but lower-paying government jobs. (They do not add that
another source of distortion is possible discrimination against lower castes
in the private sector job market. However, the same authors are also working
on a large-scale analysis of that problem; they are using methodology that
revealed large-scale implicit discrimination against African-Americans in
the US private sector.)

So if the standard myths about reservations have so little support in the
data, how can we account for their persistence? The last part of the study,
which analyses the attitudes of successful and unsuccessful applicants,
provides an eminently believable reason. It turns out that "it does not
appear that those who are denied a seat in an engineering college due to the
affirmative action programme end up expressing more negative attitudes
towards these programmes." So all those who are responsible for perpetuating
and politicising these narratives about reservations might not, after all,
actually represent those who genuinely lose from the policies.

mihir.sharma at expressindia.com

o o o



'Displaced come from stronger socio-economic backgrounds than displacers'

Wednesday, June 25, 2008

Excerpts from 'Affirmative Action in Education', by Marianne Bertrand, Rema
Hanna and Sendhil Mullainathan

Why the study
There are strong beliefs that affirmative action programmes greatly harm
non-minority groups and this belief dampens support for such programmes.
However, these beliefs are hard to evaluate, since there is very little real
evidence to date on the magnitude (if any) of the harm... In contrast, this
study assembles the most comprehensive dataset available on affirmative
action in higher education.

The data
We collected two data sets. First, we collected a census of all individuals
who took the admissions exam in 1996... To better understand outcomes across
caste groups, we interviewed about 700 households from this census of
applicants between 2004 and 2006 (approximately 8-10 years after the
entrance exam). We surveyed both the applicant and their parents to gauge
life outcomes including income and occupation, job satisfaction, social
networks, and caste identity.

How was it collected?
The enumerators first visited the parents' recorded address as of 1996 to
determine if the parents still lived there. If the parents had moved, the
enumerators went door to door and asked the neighbours for contact
information... In total, we searched for 1,984 households.

Are quota students from the economically better off sections?
The reservation policy is associated with the admission of individuals of a
lower socio-economic background. Under the assumption of a 70 per cent
enrolment rate, mean parental income among the displaced individuals is Rs
14,088 compared to Rs 8,340 among the displacing individuals; 41 per cent of
displaced individuals come from a household in which the head holds at least
a master's degree, compared to only 14 per cent of displacing individuals;
also, 59 per cent of displaced individuals attended an English-language
private school, compared to only 35 per cent of displacing individuals.

Do quota students benefit?
Attending engineering college increases the monthly income of upper-caste
individuals by between Rs 9,500 and Rs 13,000 (statistically significant in
all four specifications); in contrast, attending engineering college
increases the monthly income of lower-caste applicants by between Rs 5,500
and Rs 6,200 (statistically significant in all four specifications). Hence,
the estimates... paint a less favourable picture of the welfare implications
of the reservation policy: attending engineering college increases the
monthly income of an upper-caste candidate by Rs 3,000 to Rs 7,000 more than
it increases the monthly income of a lower-caste candidate.

The between-caste difference in the returns to an engineering education is
especially large when we compare general-caste applicants to SC
applicants... Interestingly, we cannot reject the hypothesis that the
returns between the upper-caste group and OBC are the same.

Some conclusions:
Our analysis suggests that the affirmative action policy redistributes
resources to minority groups. Contrary to the arguments of some critics, the
policy does not merely crowd out economically-disadvantaged upper-caste
students to make way for economically-advantaged lower-caste students. The
individuals who are displaced by the programme come from stronger
socio-economic backgrounds than the displacers. Hence, by targeting
disadvantaged caste groups, the policy achieves some income targeting
without generating any of the behavioural distortions typically associated
with income targeting.

Moreover, despite their low test scores, the marginal admits from lower
castes earned significant returns from attending engineering college. In
other words, our findings do not support the view that the academic
resources that are devoted to the lower-caste students are totally wasted on

The full text of the report is available online at

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