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Affirmative Action and Human Capital Investment: Theory and Evidence from a Randomized Field Experiment

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  • Cotton, Christopher
  • Hickman, Brent R.
  • Price, Joseph P.

Abstract

High-School human capital investment occurs within a competitive environment, and Affirmative Action (AA) shapes the relative competition between blacks and whites for admission to high-quality colleges. We present a theory of AA in university admissions and conduct a field experiment to mimic aspects of competition for college. We offer relative incentives to study math and track students’ time on a mathematics website. AA increases average human capital investment and exam performance for its target beneficiaries by mitigating “discouragement effects” We also find evidence that AA can promote greater equality of market outcomes and narrow achievement gaps at the same time.

Suggested Citation

  • Cotton, Christopher & Hickman, Brent R. & Price, Joseph P., 2016. "Affirmative Action and Human Capital Investment: Theory and Evidence from a Randomized Field Experiment," Queen's Economics Department Working Papers 274676, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:274676
    DOI: 10.22004/ag.econ.274676
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    References listed on IDEAS

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    1. Anat Bracha & Alma Cohen & Lynn Conell-Price, 2013. "Affirmative action and stereotype threat," Working Papers 13-14, Federal Reserve Bank of Boston.
    2. Jesse Rothstein & Albert H Yoon, 2007. "Affirmative Action in Law School Admissions:What Do Racial Preferences Do?," Working Papers 148, Princeton University, Department of Economics, Center for Economic Policy Studies..
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    4. Andrew Schotter & Keith Weigelt, 1992. "Asymmetric Tournaments, Equal Opportunity Laws, and Affirmative Action: Some Experimental Results," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 511-539.
    5. Jessica S. Howell, 2010. "Assessing the Impact of Eliminating Affirmative Action in Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 113-166, January.
    6. Eric P. Bettinger, 2012. "Paying to Learn: The Effect of Financial Incentives on Elementary School Test Scores," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 686-698, August.
    7. Peter Arcidiacono, 2005. "Affirmative Action in Higher Education: How Do Admission and Financial Aid Rules Affect Future Earnings?," Econometrica, Econometric Society, vol. 73(5), pages 1477-1524, September.
    8. Calsamiglia, Caterina & Franke, Jörg & Rey-Biel, Pedro, 2013. "The incentive effects of affirmative action in a real-effort tournament," Journal of Public Economics, Elsevier, vol. 98(C), pages 15-31.
    9. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1491-1527.
    10. Cotton, Christopher & McIntyre, Frank & Price, Joseph, 2013. "Gender differences in repeated competition: Evidence from school math contests," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 52-66.
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    Cited by:

    1. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    2. Guilherme Strifezzi Leal & Ã lvaro Choi, 2021. "Racial quotas in higher education and pre-college academic performance: Evidence from Brazil," UB School of Economics Working Papers 2021/411, University of Barcelona School of Economics.

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    Keywords

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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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