Speaker
Description
Inequality in wealth, income, and opportunities based on natural identities, especially caste and gender, is widespread. One policy tool to reduce this inequality or "level the playing field" is Affirmative Action (AA) policies. Previous research has shown that AA policies effectively increase the willingness to compete with people who benefit from AA. However, most studies focus on resource differences between groups, neglecting resource differences within groups. But it could be precisely the rich person from the beneficiary group who benefits most, a concept coined ``creamy layer'' usually referring to wealthy non-upper caste members who are more likely to benefit from caste-based affirmative action. In our experiment, we introduce both within- and between-group inequality of endowment to study the effect of group- and income-based AA policies on the willingness to compete, policy choices, fairness perceptions, and inter-group relations. In line with previous literature, within-group homogeneity increases the willingness to compete in a Tullock contest for beneficiaries but does not decrease for non-beneficiaries; in contrast, within-group heterogeneity discourages non-beneficiaries, as predicted by theory. Regarding fairness, we find that participants find group-based AA the least fair, especially with heterogeneity. This is at odds with behavior as a social planner as everyone chooses the institution according to their benefit and prefers the group-based AA over the income-based AA. We further find that the creamy layer among the beneficiaries of affirmative action does suffer backlash when winning the contest, as many points are deducted from them.
| Keyword | Poverty and Inequality |
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