Two to Tango: Multiple affirmative action policy in education and employment

Is it justified to continue awarding multiple instances of affirmative action (AA) in education and employment to the same people to reduce inequality, as is done in various countries worldwide? Previous studies have shown that proposed solutions to reduce inequality among social groups, such as single or multiple AA policies, have positive first-order effects on outcomes such as enhanced enrollment, fewer dropouts, higher attendance, and lower performance differences. However, the second-order effect of AA policies on labor market outcomes remains understudied, with mixed findings. Therefore, this study employs a quasi-natural experiment with data from 21,270 graduate students and a difference-in-differences strategy to estimate the impact of AA policies on educational and skill performance, thereby reducing inequality. We find that AAs significantly reduce educational inequalities, while significantly increasing the skills gap. However, the impact of AAs on these outcome variables was small. Furthermore, the skill difference was significantly higher than the educational gap. Hence, while AAs increase access to education, they may not necessarily enhance employment-related skills or competencies. Consequently, we advocate continuing AA policies to provide short-term relief to disadvantaged groups seeking access to educational institutions. However, individual skills and competencies are required for employment and cannot be addressed through AA policies. Given the larger skill difference even after an undergraduate degree, we propose that AA policies are institutionally required to overcome the skill gap. In other words, there could be greater emphasis on skill development, such as bridge programs, specialized courses, supplementary classes, and remedial courses, to improve employment outcomes for persons from historically marginalized groups.