Affirmative Action: One Size Does Not Fit All

68 Pages Posted: 18 Oct 2013 Last revised: 30 May 2021

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Alexander Tarasov

Ludwig Maximilian University of Munich (LMU)

Date Written: October 2013

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.

Suggested Citation

Krishna, Kala and Tarasov, Alexander, Affirmative Action: One Size Does Not Fit All (October 2013). NBER Working Paper No. w19546, Available at SSRN: https://ssrn.com/abstract=2342044

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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Alexander Tarasov

Ludwig Maximilian University of Munich (LMU) ( email )

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Germany

HOME PAGE: http://www.iwb.vwl.uni-muenchen.de/personen/assistenten/tarasov/index.html

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