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This paper examines the consequence of affirmative action for a "middle" ranked group on equity and the leader's overall performance or "efficiency." The literature on electoral quotas is invested in the equity question for disadvantaged groups, but is mostly silent on this issue. We use a randomized electoral quota for an intermediately ranked caste group (OBCs) in a large state in India to show that overall, such a quota does not affect delivery of public projects, or redistribute projects away from disadvantaged groups (SC/STs). Moreover, we show that when the group is large, the quota may in fact improve leader's performance. The improvement in overall performance does not come at a cost of lower allocation to the most disadvantaged group. We argue and provide suggestive evidence that when the group is large, such a quota for the group increases within-group electoral competition in villages. The result highlights that "efficiency" concerns regarding affirmative action may need reevaluation. It further justifies the targeting of electoral quota policy in India towards jurisdictions where the group is numerous. [ABSTRACT FROM AUTHOR]

We evaluate the impact of an affirmative action policy, which reserves quotas in public jobs for disadvantaged groups, on educational and labour market outcomes through 'incentive effects' in future employment prospects. Unlike the affirmative action policies based only on caste (in India) or race (in the United States), Nepal offers a novel context because its policy provides multiple channels of affirmation in public jobs to highly discriminated groups, depending on their caste/ethnicity, gender, geographic origin, and impairment status. Our difference-in-differences estimates using the Nepal Labour Force Survey III (2017/18) suggest that the policy significantly improved the educational and labour market outcomes of younger reservation eligible in the schoolaged cohort at the time of policy change. On average, the younger cohort improved their years of schooling by 1.53 years and monthly earnings by NPR 1,812 (approximately USD 17.76; about 11% of the national average). Our findings also indicate a higher policy impact on education for those who obtain treatment through multiple channels. However, the higher educational attainments of these multiple treatment groups are yet to transmit fully into their labour market outcomes. Our findings offer some important policy implications for not only Nepal but also societies fighting to reduce inequalities across caste, geographic, ethnic and racial groups [ABSTRACT FROM AUTHOR]