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Do race-based preferences perpetuate discrimination against marginalized ethnic groups?


  • Bruce Wydick

    () (University of San Francisco
    University of California at Santa Barbara, USA)


Race-based preferential policies have been employed in the United States and other countries such as Malaysia, South Africa, Brazil, and India to foster economic development among economically marginalized ethnic groups. This research applies a two-player signaling model to help understand labor-market effects of race-based preferential policies used in college admissions. The model shows that in the context of imperfect information in the labor market, purely race-based forms of preferential policies in college admissions are likely to lead to statistical discrimination by future employers, reducing the equilibrium wage of targeted minority groups for both college graduates and non-college graduates. In addition, average wages of the targeted group remain unchanged in the model, with the targeted group being worse off to the extent that educational signaling is costly. In conclusion, the paper argues that race-base preferences cannot substitute for policies and programs that genuinely address imbalances in college preparation between ethnic groups.

Suggested Citation

  • Bruce Wydick, 2008. "Do race-based preferences perpetuate discrimination against marginalized ethnic groups?," Journal of Developing Areas, Tennessee State University, College of Business, vol. 42(1), pages 165-181, September.
  • Handle: RePEc:jda:journl:vol.42:year:2008:issue1:pp:165-181

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    Affirmative Action; Discrimination; Signaling; Labor Markets;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing


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