Affirmative Action: One Size Does Not Fit All

Krishna, Kala; Tarasov, Alexander (September 2013): Affirmative Action: One Size Does Not Fit All. SFB/TR 15 Discussion Paper No. 407

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 e¤ect 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.

• Item Type: Paper (Discussion Paper)
• Form of publication: Preprint
• Keywords: contests; educational quotas; private benefits; social welfare
• Faculties: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > B7 - Globalisierung und der Anstieg der Vorstandsbezüge
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: D61, I23
• Language: English