Reversal of Envy
AbstractStudies of compensating discrimination (known in the U.S. as affirmative action) have not accounted for the role of envy. Yet envy affects utility. I consider the compensatingdiscrimination policies that individuals acknowledging envy would choose when behind a veil of ignorance. The institutional background for my study is India, where low castes have been provided with preferential access to public education and reserved public sector jobs. Although the Indian case is background, the conclusions apply more generally. I define envy as occurring when people with the same abilities have different incomes because of unequal education and employment opportunities. This is the case when, because of adverse discrimination, low-caste people are denied access to education and public-sector jobs, and also when, because of compensating discrimination, it is high-caste people who are correspondingly denied equal access. A benchmark case with neither adverse nor discriminatory discrimination is efficient and equitable (envy-free). Adverse and compensating discrimination both compromise efficiency and fairness. I derive the conditions that determine attitudes of a population behind the veil of ignorance to compensatingdiscrimination policies.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1106.
Date of creation: 26 Jan 2011
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Caste system; discrimination; envy; affirmative action; fairness;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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- Chavas, Jean-Paul, 2008. "On fair allocations," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 258-272, October.
- Borooah, Vani & Dubey, Amaresh & Iyer, Sriya, 2007. "The Effectiveness of Jobs Reservation: Caste, Religion, and Economic Status in India," MPRA Paper 19421, University Library of Munich, Germany.
- Mui, Vai-Lam, 1995.
"The economics of envy,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 26(3), pages 311-336, May.
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