Affirmative Action And Human Capital Investment: Theory And Evidence From A Randomized Field Experiment

Christopher Cotton and Joseph Price

No 1350, Working Paper from Economics Department, Queen's University

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: Contest Theory; Human Capital; Study Effort; Field Experiment; College Admissions; Affirmative Action; All-Pay Auction (search for similar items in EconPapers)
JEL-codes: C93 D44 D82 J15 J24 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-05
New Economics Papers: this item is included in nep-edu, nep-exp and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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