Dismantling the Legacy of Caste - Centre For Development Economics

ottom panel of Figure 2. By contrast, as shown in the bottom panel of Figure 2, the entry examination
scores exhibit a great deal of variation at the upper end of the distribution. Thus, the entry examination
provides more differentiation among high ability students than does the high school examination. As we
demonstrate in the empirical analysis that follows, this is captured quite well by our latent ability measure
in equation (2) for explaining performance in engineering colleges. For more prestigious institutions,
however, the entry examination score provides an additional source of information for differentiating
among applicants. Our empirical analysis shows this to be quite important in the attendance equation.
Let I y be a latent index of propensity to attend an engineering college. We choose a flexible
specification with caste fixed effects and high-order polynomials in r,
, and s. As detailed in the
empirical section, a specification with a fourth-order polynomial in r and third-order polynomials in
and s fits matriculation decisions quite well and yields findings that conform with the predictions
developed in the derivation of equation (9):
(12)
4 3 3
r k k s k
y
ij 0
j
k ij
k ij
k ij
ij
k 1 k 1 k 1
for j=O, ST, SC, BC-A, BC-B, BC-C, BC-D.
I r s u
The open category is the reference category.
As we explained in connection with the achievement model, we have relatively strong priors
about the relative magnitudes of the coefficients comprising latent aptitude,
, in the achievement
equation. For the attendance equation, the polynomials in
and s provide a flexible specification for
capturing tradeoffs that prospective students make among no-college, engineering college, and other
higher education options. Aside from the expectation of an inverted-U relationship of aptitude and
attendance, we do not have predictions about the relative magnitudes of the coefficients comprising in
and s in the attendance equation.
4.3. Selection
In derivation of our achievement equation (4), we argued that the coefficient of effective rank, r ,
and the caste fixed effects, j , are not biased in the presence of unmeasured ability. Hence, from the
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