Merit, Identity, and Redistribution: Experimental Evidence on Affirmative Action

Affirmative action (AA) is highly controversial. This study asks whether opposition to AA reflects a genuine commitment to merit, or whether pro-merit discourse conceals deeper identity-based considerations. Specifically, does resistance vary with the social identity of those who benefit from the policy? Using an incentivized online experiment with university students in India, we compare perceptions and rewards toward participants selected through caste-based versus income-based affirmative action. Evaluators assess test-takers’ competence and allocate monetary rewards under different selection rules. We find that beneficiaries from India’s historically stigmatized caste groups (Scheduled Castes and Tribes, or SC-ST) are perceived as less competent than non-marginalized beneficiaries, even under income-based affirmative action. This suggests that responses to affirmative action vary systematically with the social identity of beneficiaries rather than reflecting a generalized aversion to preferential treatment alone. Yet these negative perceptions do not translate into corresponding material penalties: allocations toward caste-based beneficiaries are directionally compensatory, particularly among low-income beneficiaries, whereas allocations under income-based affirmative action align more closely with perceived competence. Overall, our findings reveal a duality in responses to affirmative action: identity-driven competence stigma can coexist with redistributive behavior that does not penalize marginalized beneficiaries.