Publication - Working Paper
This study will explore whether, and to what extent one’s social identity can affect one’s aspirations (as captured by a subject’s short and long term goals), and beliefs about future outcomes. While there is a paucity of theory and evidence that addresses this in Economics, psychologist have hypothesized that priming social identity can lead to individuals aspiring and working towards goals that affirm membership in their social group (Oyersman, 20071). The anthropologist Arjun Appadurai2 argues that one’s social identity may play a significant role in shaping one’s beliefs about one’s own potential, one’s life goals and eventual economic outcomes. While recent work in the literature on the economics of identity (for example, Benjamin et al 20103, Hoff and Pandey 20064) shows that making identity salient makes individuals perform better or worse on cognitive tests, or make them exhibit different time and risk preferences (in conformance to social norms), there are no studies to date to our knowledge, that explore what effect one’s identity might have on goals and beliefs, and actual economic outcomes. Genicot and Ray (2012)5 theoretically argue that low aspirations could play a significant role in the cause and persistence of poverty and poverty traps. This project will test their theoretical claim that low aspirations can lead to the persistence of low aspirations and poor economic outcomes. We will tie this in with the recent identity economics literature from which one might hypothesize that one’s gender or caste can bias one’s aspirations and beliefs, and study whether one’s identity can affect subsequent economic outcomes through its effect on one’s aspirations. We will also explore how the salience of one’s caste or gender identity affects a parent’s beliefs about, and goals for her child, and how this affects the latter’s (short run) outcomes. In addition, the study design will help investigate the effects of setting goals, as well as the effects of social proximity to a role model, on short run outcomes. These questions will be answered through a field experiment in rural Rajasthan, in partnership with the NGO, Educate Girls, which will involve (i) recording (over multiple periods) declarations of long and short-term goals and expectations made by subjects, with and without priming the subject’s social identity (i.e., caste or gender), and (ii) observing (also over multiple periods) eventual short run outcomes. In India, affirmative action is a highly debated and contentious issue, and creating quotas for women or the so-called backward communities are the primary policy instruments that have been used or considered to date. Such policies could be complemented with (or even replaced by) alternative policies that address the possible information asymmetries and subsequent biased beliefs and low aspirations that may persist among disadvantaged groups. There is currently little or no evidence on whether and how identity affects individuals’ beliefs, aspirations and outcomes. This study would be a first step in gaining a deeper understanding of these issues.