Familiarity Does Not Breed Contempt : Diversity , Discrimination and Generosity in Delhi Schools

I exploit a natural experiment in India to identify how mixing wealthy and poor students in schools a ects social preferences and behaviors. A policy change in 2007 forced many private schools in Delhi to meet a quota of poor children in admissions. This led to a sharp increase in the presence of poor children in new cohorts in those schools, but not in older cohorts or in other schools. Exploiting this variation, and using a combination of eld and lab experiments, administrative data and test scores, I study impacts on three classes of outcomes: (i) prosocial behavior, (ii) social interactions and discrimination, and (iii) academic outcomes. First, I nd that having poor classmates makes wealthy students more prosocial and generous. They become more likely to volunteer for a charity at school, more generous towards both rich and poor students in dictator games, and choose more equitable distributions of payo s in the lab. Second, having poor classmates makes wealthy students discriminate less against poor children, measured by their teammate choice in an incentivized sports contest. Consistent with this, they become more willing to socialize with poor children outside school. Third, I nd marginally signi cant negative e ects on test scores in English, but no e ect on Hindi or Math. Overall, I conclude that mixing in schools had substantial positive e ects on the social behaviors of wealthy students, at the cost of negative but arguably modest impacts on academic achievement. To shed light on mechanisms, I exploit idiosyncratic assignment of students to study groups and nd that the e ects on social behaviors are largely driven by personal interactions between wealthy and poor students, rather than by changes in teacher behavior or curriculum. ∗Department of Economics, University of California, Berkeley. E-mail: grao@berkeley.edu. The latest version of this paper is available at https://sites.google. com/site/graoeconomics/. I thank my extraordinary advisors Stefano DellaVigna, Edward Miguel, Matthew Rabin, Frederico Finan and Ernesto Dal Bo for their encouragement, counsel and patience over the course of this project. This paper also bene ted from helpful comments at various stages from Nava Ashraf, Doug Bernheim, Lorenzo Casaburi, Jacqueline Doremus, Greg Duncan, Willa Friedman, Roland Fryer, Matt Gentzkow, Paul Gertler, Jonas Hjort, Simon Jaeger, Asim Khwaja, David Laibson, Steven Levitt, Aprajit Mahajan, Jeremy Magruder, Ulrike Malmendier, Michaela Pagel, Josh Schwartzsein, Jesse Shapiro, Charlie Sprenger, Richard Thaler, Bertil Tungodden, Betty Sadoulet, and many others, including audiences at UC Berkeley, U Chicago, Stanford, PACDEV and the National Academy of Education. Tarunima Sen and Dheeraj Gupta provided excellent research assistance. Funding for this project was generously provided by the Spencer Foundation, the National Academy of Education, the Center for Equitable Growth, the Program in Psychological Economics at UC Berkeley, the Levin Family Fellowship, the Center for E ective Global Action (CEGA) and the UC Berkeley Summer Research Grant program.