Familiarity Does Not Breed Contempt: Generosity, Discrimination and Diversity in Delhi Schools
I exploit a natural experiment in India to identify how economic diversity in schools affects wealthy students. A sudden 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. Using this variation, I study impacts on three broad classes of outcomes: (i) prosocial behavior; (ii) social interactions and discrimination, and (iii) academic outcomes. My first finding is that having poor classmates makes wealthy students more prosocial and generous. They are more likely to volunteer for a charity at school, more generous towards both rich and poor students in dictator games, and exhibit more egalitarian preferences. Second, wealthy students discriminate less against poor children, as measured in a team-selection field experiment. Closely related, having poor classmates increases their willingness to socially interact with poor children outside school. I additionally exploit idiosyncratic assignment to study groups within classrooms to show that these effects on social behaviors are largely driven by personal interactions between wealthy and poor students, rather than by changes in teacher behavior or curriculum. In contrast to the strong impacts on social outcomes, I find that poor students have mixed effects on the academic achievement of their wealthy classmates. In particular, I find marginally significant negative effects on test scores in English, but no effects on Hindi, or Math. I also detect no peer effects on disruptive behavior in the classroom, but do find substantial increases in the use of inappropriate language at school.