Working Paper: NBER ID: w20397
Authors: Christopher Cotton; Brent R. Hickman; Joseph P. Price
Abstract: Pre-College human capital investment occurs within a competitive environment and depends on market incentives created by Affirmative Action (AA) in college admissions. These policies affect mechanisms for rank-order allocation of college seats, and alter the relative competition between blacks and whites. We present a theory of AA in university admissions, showing how the effects of AA on human capital investment differ by student ability and demographic group. We then conduct a field experiment designed to mimic important aspects of competitive investment prior to the college market. We pay students based on relative performance on a mathematics exam in order to test the incentive effects of AA, and track study efforts on an online mathematics website. Consistent with theory, AA increases average human capital investment and exam performance for the majority of disadvantaged students targeted by the policy, by mitigating so-called "discouragement effects." The experimental evidence suggests that AA can promote greater equality of market outcomes and narrow achievement gaps at the same time.
Keywords: Affirmative Action; Human Capital Investment; Field Experiment; Education Policy
JEL Codes: C93; D44; D82; J15; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| affirmative action (AA) (J78) | human capital investment (J24) |
| affirmative action (AA) (J78) | exam performance (C90) |
| affirmative action (AA) (J78) | effort (D29) |
| affirmative action (AA) (J78) | performance of advantaged students (D29) |
| affirmative action (AA) (J78) | engagement and effort in learning activities (I24) |
| affirmative action (AA) (J78) | distribution of competitors (L11) |