Who benefits from minority business set-asides? The case of New Jersey

Samuel L. Myers and Tsze Chan
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Samuel L. Myers: The Humphrey Institute of Public Affairs, University of Minnesota, 301 19th Avenue South, Minneapolis, MN 55455, Postal: The Humphrey Institute of Public Affairs, University of Minnesota, 301 19th Avenue South, Minneapolis, MN 55455
Tsze Chan: Pelavin Research Institute, Washington, DC, Postal: Pelavin Research Institute, Washington, DC

Journal of Policy Analysis and Management, 1996, vol. 15, issue 2, 202-226

Abstract: Race-based remedies often are justified by evidence of prior discrimination. They work when they benefit groups previously disadvantaged. This article examines one such remedy-minority business set-asides-and its application in the award of public procurement and construction contracts by the state of New Jersey. Analyzed are contract awards to minority and non-minority|non-women-owned business enterprises in 1990, as well as in periods before, during, and after the imposition of a state minority set-aside program. Using a conventional decomposition approach, the article reveals significant discriminatory gaps in the success of minority- versus non-minority-owned firms in obtaining contracts from the state of New Jersey. The analysis suggests that minority contracting success rates fell from the pre-set-aside era to the set-aside era and that discriminatory outcomes persisted. The particular remedy chosen-while justified based on evidence of prior discrimination-appears not to have reduced the original discrimination nor did it unambiguously benefit minority businesses.

Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:15:y:1996:i:2:p:202-226

DOI: 10.1002/(SICI)1520-6688(199621)15:2<202::AID-PAM3>3.0.CO;2-N

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