Affirmative action policies are practiced around the world. This paper explores the welfare economics of such policies. A model is proposed where heterogeneous agents, distinguished by skill level and social identity, compete for positions in a hierarchy. The problem of designing an efficient policy to raise the status in this competition of a disadvantaged identity group is considered. We show that: (i) when agent identity is fully visible and contractible (sightedness), efficient policy grants preferred access to positions, but offers no direct assistance for acquiring skills; and, (ii) when identity is not contractible (blindness), efficient policy provides universal subsidies when the fraction of the disadvantaged group at the development margin is larger then their mean (across positions) share at the assignment margin.
|Date of creation:||Dec 2010|
|Date of revision:|
|Publication status:||published as Valuing Diversity Roland G. Fryer Jr. and Glenn C. Loury Journal of Political Economy Vol. 121, No. 4 (August 2013), pp. 747-774|
|Note:||LE LS PE|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harry Holzer & David Neumark, 1999.
"Assessing Affirmative Action,"
NBER Working Papers
7323, National Bureau of Economic Research, Inc.
- Roland G. Fryer, Jr. & Glenn C. Loury, 2005.
"Affirmative Action and Its Mythology,"
NBER Working Papers
11464, National Bureau of Economic Research, Inc.
- Roland G. Freyer, Jr. & Glenn C. Loury, .
"Affirmative Action in Winner-Take-All Markets,"
Boston University - Department of Economics - The Institute for Economic Development Working Papers Series
dp-132, Boston University - Department of Economics.
- Lundberg, Shelly J & Startz, Richard, 1983.
"Private Discrimination and Social Intervention in Competitive Labor Markets,"
American Economic Review,
American Economic Association, vol. 73(3), pages 340-47, June.
- Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
- Andrea Moro & Peter Norman, .
""Affirmative Action in a Competitive Economy'',"
CARESS Working Papres
96-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:16568. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.