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An efficiency argument for affirmative action in higher education

  • Elena del Rey


    (Universitat de Girona)

  • María Racionero


    (Australian National University)

We consider a dynamic framework in which generations are linked by educational background. In particular, individuals differ in ability to benefit from education, parental education and appurtenance to a group (either a disadvantaged minority or a non-minority). The individual decision to undertake education is inefficient because people fail to account for the fact that their getting education increases the chances that their children will also gain access to education. This intergenerational externality is higher for people from the disadvantaged minority, provided that the difference in expected utility for children of uneducated and educated individuals is larger within this group. This provides an argument for affirmative action in higher education, in the form of larger subsidies to individuals from the minority group, which is exclusively based on efficiency considerations.

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Article provided by IEF in its journal Hacienda Pública Española/Revista de Economía Pública.

Volume (Year): 187 (2008)
Issue (Month): 4 (December)
Pages: 41-48

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Handle: RePEc:hpe:journl:y:2008:v:187:i:4:p:41-48
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  1. George J. Borjas, 1991. "Ethnic Capital and Intergenerational Mobility," NBER Working Papers 3788, National Bureau of Economic Research, Inc.
  2. Roland G. Fryer Jr. & Glenn C. Loury, 2005. "Affirmative Action and Its Mythology," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 147-162, Summer.
  3. De Fraja, Gianni, 2002. "Affirmative Action and Efficiency in Education," CEPR Discussion Papers 3357, C.E.P.R. Discussion Papers.
  4. DEL REY, Elena & RACIONERO, Maria del Mar, . "Optimal educational choice and redistribution when parental education matters," CORE Discussion Papers RP 1582, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Harry Holzer & David Neumark, 1999. "Assessing Affirmative Action," NBER Working Papers 7323, National Bureau of Economic Research, Inc.
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