Affirmative Action for the Ethnic Majority

Kotaro Fujisaki and Rio Ikeuchi
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Kotaro Fujisaki: Department of Economics, University College London, UK and Junior Research Fellow, Research Institute for Economics & Business Administration, Kobe University, JAPAN
Rio Ikeuchi: Osaka School of International Public Policy, the University of Osaka

No DP2026-26, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: Affirmative action research has focused almost exclusively on policies targeting disadvantaged ethnic minorities, leaving open how such policies operate when they instead target the majority. We study Malaysia's New Economic Policy (NEP, 1971–1990), which granted the Malay majority preferential access to university admissions, public-sector employment, and corporate ownership. Using a cohort-based difference-in-differences design, we find that Malay cohorts exposed to the NEP acquired more years of education and were more likely to enter skilled occupations. Applying a structural model, we estimate that improved talent allocation during the NEP period raised GDP per capita by around 10%, driven primarily by reduced frictions in human capital accumulation rather than in the labor market. Our findings suggest that affirmative action targeting the majority can shift talent allocation, with implications for economic growth.

Keywords: Affirmative action; Ethnic majority; Talent allocation; Malaysia (search for similar items in EconPapers)
Pages: 46 pages
Date: 2026-09
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