OB Research Seminar - Amma Panin, University of Louvain

Ethnonationalist governments frequently adopt policies that challenge the status of ethnic and religious minorities as equal members of the nation. We propose that such policies—whether symbolic or material—impose an attention tax on marginalized groups, reducing their cognitive bandwidth and leading to suboptimal economic decisions. We test this hypothesis in India, where the ruling party promotes a nationalist ideology favouring Hindus over Muslims. In a field experiment with nearly 3,000 workers performing data entry and information processing tasks, participants were randomly exposed to social media content referencing either symbolic or material exclusionary policies. After completing the labour market task, in which treated participants performed better, workers chose between two types of payment contracts. Despite their higher productivity, treated participants were significantly more likely to select economically suboptimal (‘wrong’) contracts. Our findings demonstrate that even purely symbolic exclusionary policies impose an attention tax, leading to tangible economic consequences and exacerbating economic marginalisation through cognitive and psychological channels.