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What determines public support for affirmative action?

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Author Info
Murat F. Iyigun
Andrew T. Levin

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Abstract

We present a model of public higher education finance in which demand for educational services can exceed supply because of indivisibilities in educational investment. In such situations, a screening mechanism--which may be imperfect because of direct or indirect discrimination--is required for allocation. We show how changes in the education premium affect political support for affirmative action policies. When the education premium is relatively low, the matching efficiency gains provided by affirmative action policies are relatively high compared to the opportunity cost of not acquiring education, and the majority supports broader affirmative action. In contrast, when the education premium is high, the opportunity cost of not acquiring educated is high relative to the matching efficiency gains provided by affirmative action policies, and the majority's support for affirmative action is weaker. With endogenous wages, the negative relationship between the returns to education and affirmative action is reinforced.

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Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 620.

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Date of creation: 1998
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Keywords: Discrimination in employment ; Education;

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  1. Fernandez, R., 1998. "Education and Borrowing Constraints: Tests vs Prices," Working Papers 98-17, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  2. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Blackwell Publishing, vol. 60(1), pages 35-52, January. [Downloadable!] (restricted)
  3. Lundberg, Shelly J, 1991. "The Enforcement of Equal Opportunity Laws under Imperfect Information: Affirmative Action and Alternatives," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 309-26, February. [Downloadable!] (restricted)
  4. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 813-34, August.
  5. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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  6. Fernandez, Raquel & Gali, Jordi, 1999. "To Each According to . . . ? Markets, Tournaments, and the Matching Problem with Borrowing Constraints," Review of Economic Studies, Blackwell Publishing, vol. 66(4), pages 799-824, October. [Downloadable!] (restricted)
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  7. 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. [Downloadable!] (restricted)
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  8. repec:fth:prinin:377 is not listed on IDEAS
  9. Coate, Stephen & Loury, Glenn, 1993. "Antidiscrimination Enforcement and the Problem of Patronization," American Economic Review, American Economic Association, vol. 83(2), pages 92-98, May. [Downloadable!] (restricted)
  10. Gradstein, Mark & Justman, Moshe, 1997. " Democratic Choice of an Education System: Implications for Growth and Income Distribution," Journal of Economic Growth, Springer, vol. 2(2), pages 169-83, July. [Downloadable!] (restricted)
  11. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
  12. Mark Gradstein & Moshe Justman, . "Democratic Choice of an Education System: Implications for Growth and Income Distribution," CARESS Working Papres 97-05, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
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