The Changing Contours of Intergroup Disparities and the Role of Preferential Policies in a Globalizing World- Evidence from India

How persistent are traditional socioeconomic hierarchies in the face of marketization, significant structural shifts in the economy, and increased political representation of lower-ranked groups, and do preferential policies have a role in addressing these inequities among social groups? We answer these questions in the context of India by comparing successive age cohorts of three broad social groups - Scheduled Castes and Tribes (SC-STs), Other Backward Classes (OBCs) and "Others" (proxy for upper castes) - and provide the first disaggregated picture of the evolution of inter-caste disparities since Indian independence in 1947. Based on data from the National Sample Survey (NSS), our results show convergence in terms of literacy and primary education. However, in terms of access to higher education, white-collar jobs, average household expenditure and daily wages, we find evidence of divergence over time. As the NSS does not directly contain data on beneficiaries of affirmative action, we implement an identification strategy that exploits the fact that access to preferential policies are jointly determined by both the age and the social group of the individual. The first- and second-order effects of affirmative action show that extending job quotas to OBCs in 1993 had direct positive effects on access to government jobs, as well as indirect effects on secondary school attainment.