The incidence of affirmative action: Evidence from quotas in private schools in India

Abstract:
This paper studies the effects of India’s main school-integration policy — a 25% quota in private schools for disadvantaged students, whose fees are reimbursed by the state — on direct beneficiaries. Combining survey and administrative data from the state of Chhattisgarh, with lottery-based allocation of seats in oversubscribed schools, we show that receiving a quota seat makes students more likely to attend a private school (by 24 percentage points). However, within eligible caste groups, quota applicants are drawn disproportionately from more-educated and economically better-off households and over three-quarters of the applicants who were not allotted a quota seat also attended a private school as fee-paying students. Consequently, we estimate that ∼ 70% of the total expenditure on each quota seat is inframarginal to school choice. The policy delivers clear gains for direct beneficiaries but is unlikely to affect school integration without broadening the pool of applicants.