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Promoting Educational Opportunities: Long-Run Implications of Affirmative Action in College Admissions

49 Pages Posted: 14 Jul 2015 Last revised: 26 Jul 2017

Bernard Herskovic

University of California, Los Angeles (UCLA) - Anderson School of Management

Joao Ramos

Marshall School of Business - University of Southern California

Date Written: January 24, 2017

Abstract

This paper investigates the implications of affirmative action in college admissions for welfare, aggregate output, educational investment decisions and intergenerational persistence of earnings. We construct an overlapping-generations model in which parents choose how much to invest in their child's education, thereby increasing both human capital and likelihood of college admission. Affirmative action improves the pool of admitted students, although it changes incentives towards educational investments. We calibrate the model to quantify affirmative action long-run effects. We find that affirmative action targeting the bottom quintile of the income distribution is a powerful policy to reduce intergenerational persistence of earnings and improve welfare and aggregate output.

Keywords: Affirmative Action, Intergenerational Mobility, Educational Investment

JEL Classification: I2, E24, J62

Suggested Citation

Herskovic, Bernard and Ramos, Joao, Promoting Educational Opportunities: Long-Run Implications of Affirmative Action in College Admissions (January 24, 2017). Available at SSRN: https://ssrn.com/abstract=2628303 or http://dx.doi.org/10.2139/ssrn.2628303

Bernard Herskovic (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

Los Angeles, CA 90095-1481
United States

HOME PAGE: http://bernardherskovic.com

Joao A Ramos

Marshall School of Business - University of Southern California ( email )

701 Exposition Boulevard, STE 205
Los Angeles, CA 90089-1422
United States

HOME PAGE: http://www.joaoaramos.com/

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