Working Paper: NBER ID: w19546
Authors: 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.
Keywords: affirmative action; preferences; welfare; education; selection effect; effort effect
JEL Codes: D61; I23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Affirmative action in costly education contexts (like the U.S.) (I24) | Welfare improvements (I38) |
| Affirmative action in subsidized education contexts (like India) (I24) | Welfare reduction (I38) |
| Unequal treatment of identical agents (C78) | Welfare improvements under certain conditions (D69) |
| Context of education (I24) | Effectiveness of affirmative action (J78) |