Social Identity

Quotas and schooling decisions

  • Blog Post Date 03 April, 2014
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Gaurav Khanna

University of California, San Diego

Affirmative action, as an instrument for bridging inequalities across social groups, has been a contentious issue for decades. This column analyses the impact of reservation in public sector jobs and colleges for ‘Other Backward Classes’, implemented in India in the 1990s. It finds that the policy did incentivise beneficiaries to stay in school longer so that they could take advantage of quotas.

The costs and benefits of affirmative action policies have been hotly contested for many years in countries across the world. In India, the Scheduled Castes (SCs) and Schedules Tribes (STs) have been the traditional beneficiaries of these policies, and the net was widened to include Other Backward Castes (OBCs) in the 1990s. Most of the debate in political and academic circles in India focuses on the impact of affirmative action in colleges on the quality of graduates, and the direct costs faced by groups excluded from this policy. In this context, researchers usually look at SC-STs, while the impact on OBCs is relatively understudied. Some academic work on SC-STs shows evidence of “strong positive economic impacts” on students who benefit from college reservation (Bertrand et al. 2010, Bagde et al. 2012), whereas other studies discuss how these students actually “fall-behind” in college (Krishna and Robles 2012). Absent from this conversation, however, is whether quotas incentivise lower-caste students to stay in school for longer, rather than dropping out - given that they know they are eligible beneficiaries of these polices.

Quotas make it easier for lower-caste students to make it into colleges or government jobs. This may, on the one hand, lead them to reduce the amount of effort they put into their schooling since they need to cross a lower cut-off. On the other hand, it may prevent drop-outs, if they think that attaining a certain level of education will help them benefit from these quotas. For example, reservation in colleges may incentivise lower-caste students to finish high school and try for that relatively easy to obtain college seat, rather than give up hope of getting college admission and dropping out. Similarly, different tiers of government jobs require different qualifications, and reservation in these jobs may then encourage students to attain the requisite levels of education to benefit from the quotas.

Impact of job reservation on OBC schooling

When the V.P. Singh government tried to implement the Mandal Commission recommendations in 1989 to reserve seats for OBCs, it was met with protests in major urban areas. Between 1991 and 1993, the government implemented this reservation in government jobs, but it was another 13 years before they could expand it to most Central Universities. In a recent paper, I use National Sample Survey (NSS) data to compare the impact of the Mandal policy on OBCs and non-OBCs, and impact on the years of schooling for students who were young enough in 1993 to change their schooling decisions (to stay in school or drop out) vis-à-vis those in their mid-20s who were too old to return to school (Khanna 2013).

Between 1950 and 1993, OBCs had, on average, more years of education than SCs and STs, but less than the general category of students. But once job reservation was implemented, the education gap between OBCs and general category students began to shrink. Between 1993 and 2000, OBC students had, on average, attained 1.38 more years of education, over and above any gains made by non-OBCs (including both general category students and SC-STs). More students were not only going to school, but also crossing educational thresholds like finishing middle school or secondary school.

Impact on social groups excluded from the policy

Unfortunately, in this same period (1993-2000), such gains were not seen for other social groups who started out at similar levels of education as the OBCs, as they were not beneficiaries of the policy. Muslims did not catch up with the non-Muslims, and the poorer sections of the general category students were still lagging behind the rich. Therefore, the improvement in educational attainment by the OBCs could not have been from policies that targeted all social groups, since the impact of policies that were meant to benefit all communities would have shown up on Muslims and poorer general category students as well. For example, there were no additional gains for OBCs in regions that spent more money on schooling infrastructure than regions that spent less. Furthermore, poorer OBCs had more than double the gains of their richer counterparts. This could be explained by the fact that the ‘creamy-layer’ provision in the policy prohibits OBCs whose parents are in certain professions and above a certain income threshold from benefiting from reservation. This catch-up was seen all over the country, and not just in states like Bihar and Uttar Pradesh where there were also strong movements in electoral politics. The evidence, in general, shows that the nation-wide job reservation in the 1990s incentivised OBCs to stick around in school for longer.

Reservation policies at the state level

While national-level reservation for OBCs started only in the 1990s, many states had OBC quotas for quite a few years1. However, the proportion of seats reserved and the percentage of the population that is OBC varies from state to state. Some southern states, for example, not only had a longer history of reservation, but also a higher ‘intensity’ of reservation by reserving more seats for OBCs relative to how big their OBC population was. If we compare the impact across regions, one can see that the OBC catch-up is more pronounced in states that had a higher ‘intensity’ of reservation. However, this impact of higher quotas peters off after a certain level, indicating limited gains from continuously ratcheting up the percentage of seats reserved.

To understand these results better, one can focus on the state of Haryana. In 1990, Haryana established a Commission to identify which jatis (sub-castes) should be classified as OBCs. They created an ‘index of backwardness’ based on a state-wide socio-economic survey, and classified any sub-caste with a score above a certain cut-off to be OBC, and made them eligible for reservation in state-run colleges and jobs. Before any reservation, sub-castes who were just above the cut-off had similar levels of income and worked in similar occupations, compared to sub-castes just below the cut-off. Older members of sub-castes above and below the cut-off had similar levels of education because they were too old to change their schooling decisions at the time the reservation were implemented. Using the ARIS-REDS2 data from eight years after the policy was implement, I find that the only thing that differed between these sub-castes was that younger members of jatis who were just above the cut-off (and hence eligible for reservation) had about two more years of education than their counterparts in jatis just below this threshold. Reservation had incentivised these students to stay in school for longer.

Concluding remarks

That educational inequalities need to be bridged is hardly contested. What is of issue, however, is how to do it. While affirmative action policies may incentivise students to stick around in school longer, a number of other considerations need to be taken into account before tallying up the costs and benefits of these policies and conclusively deciding whether we should use them or not. Costs like larger class sizes and impacts on the quality of education (due to peer effects and other factors), need to be kept in mind. If governments do not expand the total number of seats, reservation also comes with costs to general-category students who now have access to fewer seats. Moreover, these policies exclude certain other groups (like poorer sections of the general category) who also fare poorly on socio-economic indicators. In addition, there is an underlying politicisation of these issues by various groups that may not be in everyone’s best interest. Therefore, whether these policies are the best instrument for closing the gap or not depends on an evaluation of other possibilities, which is absent from this discussion. For now however, it is clear that affirmative action can help students from underprivileged backgrounds like the OBCs attain more years of education and look forward to better job prospects in the future.


  1. States such as Mysore and Karnataka had quotas during the British Raj. Other states started college and/ or job quotas around the 1970s.
  2. The National Council of Applied Economic Research (NCAER) has conducted a panel survey of rural households in India. The first three waves (1969, 1970 and 1971) were called Additional Rural Incomes Survey (ARIS).The fourth and fifth waves (1981, 1999) were called Rural Economic and Demography Survey (REDS). This paper uses the 1999 wave.

Further Reading

  • Bagde, Surendrakumar, Dennis Epple and Lowell Taylor (2012), ‘Dismantling the Legacy of Caste: Affirmative Action in Indian Higher Education’, NBER Summer Institute.
  • Bertrand, Marianne, Rema Hanna, Sendhil Mullainathan (2010), “Affirmative action in education: Evidence from engineering college admissions in India”, Journal of Public Economics, Volume 94, Issues 1–2, February 2010, Pages 16-29,
  • Khanna, Gaurav (2013), “That´s Affirmative: Incentivizing Standards or Standardizing Incentives?”, December 5, 2013. Available at SSRN:
  • Krishna, Kala and Veronica Frisancho Robles (2012), “Affirmative Action in Higher Education in India: Targeting, Catch Up, and Mismatch” (working paper).
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