February 09, 2018
Activities /
Posted by NCID

Who are the disadvantaged? There’s debate around this question. There are those who argue that policies should aim to favor historically disadvantaged groups, that is, lower castes. Conversely, there are others that favor incentivizing the poor regardless of their caste. Also, should the system provide incentives to students based on merit such that every student has an opportunity, or should it only aim the disadvantaged? 

Sutanuka Roy, a PhD candidate at the London School of Economics, aims to provide evidence on this topic in her paper “Disruptive Effects of Preferential Incentives: Evidence from Field experiments in Indian Universities”, which she presented on February 9th at the University of Navarra. 

When incentivizing the poor, only an average of 9% students per class are eligible for treatment, about 62 dollars for placing in the top 40% in a standardized test on different subjects depending on the group. The rest of the class gets excluded from competing for that prize. Around 50% are eligible when the system favors those born in lower castes. 

Results show that financial targeting has a negative effect on outcomes for the whole cohort. Roy explains that those students who are eligible for benefits are the most disadvantaged and rely on their peers to study and perform better. In India teachers can’t be fired, their absenteeism is high, and the quality of their lectures is relatively low. “They don’t teach much in class so then they teach better through private classes where they earn more money from those that can afford paying private tuition”, she explained. 

Financial targeting therefore produces a resentment and discouragement effect that leads to noncooperation. “Students without benefits find preferential treatment unfair, seem unmotivated and also reduce cooperation. This, in turn, affects test scores in all groups”, Roy said. There is no effect the incentive favors the historically disadvantaged.

The type of incentives also has an effect in friendship ties. If two students are very good friends their relationship won’t break up if one is not included in the system, however class colleagues will distance from those who are receiving benefits. “If people who get excluded do not cooperate it has a negative effect because normally their best friends are also in their same situation, which leads to those disadvantaged to feel excluded”, displayed Roy.

This investigation helps to address the policy debate on affirmative action policy based on historical disadvantage, caste, or immediate disadvantage, income. Through social targeting more prospects are incentivized to compete and therefore a cohort is unaffected by preferential policies. Excluding a majority of the class from competing distances colleagues, reduces cooperation amongst them, and ultimately, lowers class results.