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Affirmative Action: One Size Does Not Fit All

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  • Kala Krishna
  • Alexander Tarasov

Abstract

This paper identifies a new reason for giving preferences to the disadvantaged using a model of contests. There are two forces at work: the effort effect working against giving preferences and the selection effect working for them. When education is costly and easy to obtain (as in the U.S.), the selection effect dominates. When education is heavily subsidized and limited in supply (as in India), preferences are welfare reducing. The model also shows that unequal treatment of identical agents can be welfare improving, providing insights into when the counterintuitive policy of rationing educational access to some subgroups is welfare improving.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19546.

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Date of creation: Oct 2013
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Handle: RePEc:nbr:nberwo:19546
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Find related papers by JEL classification:
  • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
  • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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  1. Loury, Linda Datcher & Garman, David, 1993. "Affirmative Action in Higher Education," American Economic Review, American Economic Association, vol. 83(2), pages 99-103, May.
  2. Tolga Yuret, 2008. "An Economic Analysis of Color-Blind Affirmative Action," Journal of Law, Economics and Organization, Oxford University Press, vol. 24(2), pages 319-355, October.
  3. Lance Lochner & Alexander Monge-Naranjo, 2011. "Credit Constraints in Education," NBER Working Papers 17435, National Bureau of Economic Research, Inc.
  4. Verónica C. Frisancho Robles & Kala Krishna, 2012. "Affirmative Action in Higher Education in India: Targeting, Catch Up, and Mismatch," NBER Working Papers 17727, National Bureau of Economic Research, Inc.
  5. 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.
  6. Jimmy Chan & Erik Eyster, 2003. "Does Banning Affirmative Action Lower College Student Quality?," American Economic Review, American Economic Association, vol. 93(3), pages 858-872, June.
  7. Fernández, Raquel & Galí, Jordi, 1997. "To Each According To...? Markets, Tournaments, and the Matching Problem with Borrowing Constraints," CEPR Discussion Papers 1627, C.E.P.R. Discussion Papers.
  8. Andrea Moro, 2003. "The Effect Of Statistical Discrimination On Black-White Wage Inequality: Estimating A Model With Multiple Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 467-500, 05.
  9. Jesse Rothstein & Albert H. Yoon, 2008. "Affirmative Action in Law School Admissions: What Do Racial Preferences Do?," NBER Working Papers 14276, National Bureau of Economic Research, Inc.
  10. Andrea Moro & Peter Norman, . "Affirmative Action in a Competitive Economy," Penn CARESS Working Papers ca48ba70927f48a4e11034658, Penn Economics Department.
  11. Qiang Fu, 2006. "A Theory of Affirmative Action in College Admissions," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 420-428, July.
  12. Chade, H. & Lewis, Gregory & Smith, L., 2014. "Student Portfolios and the College Admissions Problem," Scholarly Articles 12363836, Harvard University Department of Economics.
  13. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  14. James Fain, 2009. "Affirmative Action Can Increase Effort," Journal of Economic Interaction and Coordination, Springer, vol. 30(2), pages 168-175, June.
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Cited by:

  1. Saziye P. Akyol & Kala Krishna, 2014. "Preferences, Selection, and Value Added: A Structural Approach," NBER Working Papers 20013, National Bureau of Economic Research, Inc.

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