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Abstract

This article shows that reverse discrimination policies can find a justification purely on efficiency grounds. We study the optimal provision of education when households belong to different groups, differing in the distribution of the potential to benefit from education among individuals, which is private information. The main result is that high-potential individuals from groups with relatively few high-potential individuals should receive more education than otherwise identical individuals from groups with a more favorable distribution of these benefits. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 46 (2005)
Issue (Month): 3 (08)
Pages: 1009-1031

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Handle: RePEc:ier:iecrev:v:46:y:2005:i:3:p:1009-1031

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Find related papers by JEL classification:

• I28 - Health, Education, and Welfare - - Education - - - Government Policy
• D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

References

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1. L‚onard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521337465.
   
   • L‚onard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521331586.
2. Milgrom, Paul & Oster, Sharon, 1987. "Job Discrimination, Market Forces, and the Invisibility Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 102(3), pages 453-76, August.
   
   • Paul R. Milgrom, 1984. "Job Discrimination, Market Forces and the Invisibility Hypothesis," Cowles Foundation Discussion Papers 708R, Cowles Foundation for Research in Economics, Yale University, revised 1985.
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4. Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
   
   • Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-47, June.
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9. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
10. John Cawley & Karen Conneely & James Heckman & Edward Vytlacil, 1996. "Cognitive Ability, Wages, and Meritocracy," NBER Working Papers 5645, National Bureau of Economic Research, Inc.
11. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, April.
12. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December.
    
    • Coate, S. & Loury, G.C., 1992. "Will Affirmative Action Policies Eliminate Negative Stereotypes?," Papers 3, Boston University - Department of Economics.
13. Rubinstein, Yona & Tsiddon, Daniel, 1999. "Coping with Technological Progress: The Role of Ability in Making Inequality so Persistent," CEPR Discussion Papers 2153, C.E.P.R. Discussion Papers.
    
    • Rubinstein, Y. & Tsiddon, D., 1998. "Coping with Technological Progress: the Role of Ability in Making Inequality so Persistent," Papers 27-98, Tel Aviv.
14. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141 Elsevier.
    
    • Eric A. Hanushek, 2002. "Publicly Provided Education," NBER Working Papers 8799, National Bureau of Economic Research, Inc.
15. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
16. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
17. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.

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Citations

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Cited by:

1. Schneider, Andrea, 2010. "Redistributive taxation vs. education subsidies: Fostering equality and social mobility in an intergenerational model," Economics of Education Review, Elsevier, vol. 29(4), pages 597-605, August.
2. Zöe Kuehn & Pedro Landeras, 2010. "The Effect of Family Background on Student Effort," Working Papers 2010-31, FEDEA.
   
   • Kuehn, Zoe & Landeras, Pedro, 2012. "The Effect of Family Background on Student Effort," MPRA Paper 40531, University Library of Munich, Germany.
3. Hugo Mialon & Sue Mialon, 2008. "The Economics of Search Warrants," Emory Economics 0810, Department of Economics, Emory University (Atlanta).
4. De Fraja, Gianni, 2011. "The source of differences in population distributions," Mathematical Social Sciences, Elsevier, vol. 62(2), pages 130-132, September.
5. A. Tampieri, 2011. "Social Background Effects on School and Job Opportunities," Working Papers wp779, Dipartimento Scienze Economiche, Universita' di Bologna.
   
   • Alessandro Tampieri, 2009. "Social Background Effects on School and Job Opportunities," Discussion Papers in Economics 09/26, Department of Economics, University of Leicester, revised Sep 2010.
6. Hugh Gravelle & Luigi Siciliani, 2009. "Third degree waiting time discrimination: optimal allocation of a public sector healthcare treatment under rationing by waiting," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 977-986.
   
   • Hugh Gravelle & Luigi Siciliani, 2007. "Third degree waiting time discrimination: optimal allocation of a public sector health care treatment under rationing by waiting," Discussion Papers 07/22, Department of Economics, University of York.
7. Robert Dur & Amihai Glazer, 2005. "Subsidizing Enjoyable Education," Tinbergen Institute Discussion Papers 05-010/1, Tinbergen Institute, revised 29 Aug 2007.
8. Robert Dur & Amihai Glazer, 2005. "Subsidizing Enjoyable Education," CESifo Working Paper Series 1560, CESifo Group Munich.
   
   • Dur, Robert & Glazer, Amihai, 2008. "Subsidizing Enjoyable Education," Labour Economics, Elsevier, vol. 15(5), pages 1023-1039, October.

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