Levelling the Playing Field: 200 Years of Affirmative Action and Human Capital Accumulation in China

Abstract

There is a long held but untested belief that affirmative action will level the playing field and eventually be unnecessary. We exploit academic institutional changes in the history of China to provide direct evidence. We show that a 200-year place-based quota policy successfully raised academic competence for the historically disadvantaged regions even after the policy concluded. This implies human capital accumulation is sustainable without further support. Our theory rationalizes the findings by arguing affirmative action can raise human capital to a higher equilibrium. Strong intergenerational spillovers are a key mechanism for sustainable growth.

Keywords: place-based affirmative action, human capital accumulation, intergenerational spillovers, multiple equilibria, civil service exam

JEL Classification: I23, I28, J24, N35