Do Reservation Policies Affect Productivity In The Indian Railways?

The objective in this paper is to shed some empirical light on a claim often made by critics of affirmative action policies: that increasing the representation of members of marginalized communities in jobs – and especially in relatively skilled positions – comes at a cost of reduced efficiency. A systematic empirical analysis of productivity in the Indian Railways is undertaken in order to determine whether the policy of reserving jobs for Scheduled Castes and Scheduled Tribes has actually reduced productive efficiency in the railway system. No evidence have been found that affirmative action in hiring has reduced the efficiency of the Indian Railways. Indeed, some of the results suggest that the opposite is true, providing tentative support for the claim that greater labour force diversity boosts productivity. [Working Paper No. 185]