Does Affirmative Action Incentivize Schooling? Evidence from India

Affirmative action raises the likelihood of getting into college or obtaining a government job for minority groups in India. I study how this change in future prospects affects schooling incentives, and find that minority group students are incentivized to stay in school longer. This approach is novel in that it focuses on the incentives affirmative action provides to those who are not yet eligible for benefits per se. Data from state commission reports allow me to use a regression discontinuity (RD) and difference-in-discontinuities analysis, estimated along a socio-economic index. These results are supported at the national level by a difference-in-differences design, and using variation in state-level policies. Together these estimators consistently show that affirmative action policies incentivize about 0.8 additional years of education for the average minority group student, and 1.2 more years of education for a student from a marginal minority sub-group. Given the debates about the effectiveness of such policies, it is particularly important for both researchers and policymakers to account for incentive effects when evaluating affirmative action programs