The seminar by Russell Toth previously scheduled for 27 March has been postponed until 22 May.

This paper reports on the first large-scale randomized field experiment involving legally-recognized minorities to examine the effects of providing performance-based financial incentives to disadvantaged students on high stakes university test scores. Two definitions of ‘disadvantaged’ are examined: income disadvantage; and social disadvantage of belonging to minority (lower caste) groups. The paper estimates the impact of two affirmative action policies on the disadvantaged groups that the policies target and on the excluded relatively advantaged peers. When only poor students were given the opportunity to win the prize incentives, the average test scores of whole cohort decreased by 0.14 standard deviations. There is a negative spillover effect on the test scores of the non-poor peers who are excluded from the opportunity to win the prize incentives. The paper provides evidence of social tension and consequent non-cooperation among peers when only poor students are incentivised and majority of the (non-poor) peers are excluded.