Affirmative action, meritocracy, and efficiency

Politics, Philosophy and Economics

Volumn 7, Issue 2, 2008, Pages 131-158

  Durlauf, Steven N ^a  

^a UNIVERSITY OF WISCONSIN   (United States)

Author keywords

Affirmative action; College admissions; Efficiency; Meritocracy

Indexed keywords

EID: 42149196024     PISSN: 1470594X     EISSN: 17413060     Source Type: Journal    
DOI: 10.1177/1470594X08088726     Document Type: Article

References (89)

1. Derek Bok and William Bowen, The Shape of the River (Princeton, NJ: Princeton University Press, 1998).
2. Thomas Kane, 'Racial and Ethnic Preferences in College Admissions', in The Black-White Test Score Gap, edited by C. Jencks and M. Philips (Washington, DC: Brookings Institution Press, 1998), p. 432.
3. Mark Long, 'College Applications and the Effects of Affirmative Action', Journal of Econometrics 121 (2004): 319-42.
4. Linda Wightman, 'The Threat to Diversity in Legal Education: An Empirical Analysis of the Consequences of Abandoning Race as a Factor in Law School Admission Decisions', New York Law Review 72 (1997): 1-53.
5. Eric Grodsky, 'Compensatory Sponsorship in Higher Education', American Journal of Sociology 112 (2007): 1662-712.
6. See Mark Long, 'Race and College Admissions: An Alternative to Affirmative Action'?' Review of Economics and Statistics 86 (2004): 1020-33.
7. Maria Cancian, 'Race Versus Class-Based Affirmative Action in College Admissions', Journal of Policy Analysis and Management 17 (1998): 94-105.
8. Sigal Alon and Marta Tienda, 'Diversity, Opportunity, and the Shifting Meritocracy of Higher Education', American Sociological Review 72 (August 2007): 487-511.
9. Alan Krueger, Jess Rothstein, and Sarah Turner, 'Race, Income and College in 25 Years: Evaluating Justice O'Connor's Conjecture', American Law and Economics Review 8 (2006): 282-305.
10. The philosophy literature of course contains defenses and criticisms of affirmative action on deontological grounds. I have found the following collections of essays to be especially helpful: Steven Cahn (editor), The Affirmative Action Debate (London: Routledge, 1995)
11. and Marshall Cohen, Thomas Nagel, and Thomas Scanlon (editors), Equality and Preferential Treatment (Princeton, NJ: Princeton University Press, 1977).
12. See also Michel Rosenfeld, Affirmative Action: A Philosophical and Constitutional Inquiry (New Haven, CT: Yale University Press, 1993)
13. and the recent, book-length debate by Carl Cohen and James Sterba, Affirmative Action and Racial Preference (Oxford: Oxford University Press, 2003).
14. I thank Gerald Gaus for pointing out the importance of this assumption.
15. See Claude M. Steele and James Aronson, 'Stereotype Threat and the Intellectual Test Performance of African Americans', Journal of Personality and Social Psychology 69 (1995): 797-811
16. and Mary J. Fischer and Douglas Massey, 'The Effects of Affirmative Action in Higher Education', Social Science Research 36 (2007): 531-49.
17. Gerald Gaus, 'Social Complexity and Evolved Moral Principles', in Liberalism, Conservatism, and Hayek's Idea of Spontaneous Order, edited by P. McNamara (London: Palgrave Macmillan, forthcoming).
18. This framework has been a workhorse for the study of inequality since Gary Becker and Nigel Tomes, 'An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility', Journal of Political Economy 87 (1979): 1153-89
19. and Glenn Loury, 'Intergenerational Transfers and the Distribution of Earnings', Econometrica 49 (1981): 843-67.
20. This is not a necessary assumption. Test scores and grades may be used to produce an estimate of a student's actual human capital, for example.
21. See Christopher Jencks and Susan Mayer, 'The Social Consequences of Growing Up in a Poor Neighborhood', in Inner-City Poverty in the United States, edited by L. Lynn and M. McGreary (Washington, DC: National Academy Press, 1990), pp. 111-186.
22. There is some ambiguity in differentiating equity and efficiency since at one level, efficiency refers to the choice of an admissions policy which is optimal relative to some objective function of a policymaker; this objective function can in turn include measures of what is conventionally understood to mean equity. I believe public policy discussions tend to distinguish between policies which maximize aggregate output in some sense and those that achieve some notion of a just allocation of slots, and so will avoid this ambiguity by equating efficiency with meeting objective functions that do not incorporate such considerations.
23. Richard Posner, 'Utilitarianism, Economics, and Legal Theory', Journal of Legal Studies 8 (1979): 103-40.
24. Peter Hammond, 'The Economics of Justice and the Criterion of Wealth Maximization', Yale Law Journal 91 (1982): 1493-507 provides a critique of Posner's claim to have developed a perspective that improves on standard criticisms of utilitarianism.
25. Amartya Sen, 'Personal Utilities and Public Judgements: or What's Wrong with Welfare Economics'?' Economic Journal 89 (September 1979): 537-58.
26. Steven Durlauf and Ananth Seshadri, 'Is Assortative Matching Efficient?' Economic Theory 21 (2003): 475-93.
27. See Gary Becker, 'A Theory of Marriage: Part I', Journal of Political Economy 81 (1973): 813-46.
28. Andreas Prat, 'Should a Team be Homogeneous'?' European Economic Review 40 (2002): 1187-207
29. and Durlauf and Seshadri, 'Is Assortative Matching Efficient?' develop additional results on the relationship between complementarity and the efficiency of assortative matching.
30. Here, I rely on George Sher, Desert (Princeton, NJ: Princeton University Press, 1987).
31. See David Miller, 'Deserving Jobs', The Philosophical Quarterly 42(167): 161-81. For Miller, these factors amount to the effect an employee has on the future profitability of a firm, subject to the constraint that this effect is itself measured with respect to legitimate behavior on the part of others. So, the fact that racial prejudice by other workers will affect firm productivity does not affect the desert of a black applicant; presumably, one would also rule out prejudice on the part of customers.
32. The fact that the corporation may have market power in this example is not relevant to the argument. Once one considers profit maximization by a large organization, issues of imperfect information can arise. Gerald Gaus (personal communication) has made the interesting suggestion that competition among campuses for students via meritocratic admissions rules might promote efficiency when policymakers cannot perfectly monitor resource use by the individual campuses. As far as I know, this idea has not been explored either theoretically or empirically.
33. Charles Moskos and John Sibley Butler, All That We Can Be (New York: Basic Books, 1996).
34. i). As is well known, if w(·) is concave, then some preference by the policymaker for egalitarian distributions is built into the social welfare function even though social welfare places no intrinsic value on equality.
35. Harry Hölzer and David Neumark, 'Assessing Affirmative Action', Journal of Economic Literature 38, 3 (2000): 483-568.
36. Julian R. Betts and Jamie L. Shkolnick, 'The Effects of Ability Grouping on Student Achievement and Resource Allocation in Secondary Schools', Economics of Education Review 19 (2000): 1-15.
37. Individual studies may be identified in which classroom complementarities appear to be present. See, for example, Maureen Hallinan, 'Ability Grouping and Student Learning', Brookings Papers on Education Policy (2003): 95-124. While Hallinan does not focus on complementarities, she provides evidence that they are present in English but not Mathematics. But my reading of the literature suggests that the Betts and Shkolnick summary of the state of empirical evidence is reasonable. See Betts and Shkolnick, 'The Effects of Ability Grouping on Student Achievement and Resource Allocation in Secondary Schools'.
38. Adam Gamoran, 'Instructional and Institutional Effects of Ability Grouping', Sociology of Education 59 (1986): 185-198.
39. See William Brock and Steven Durlauf, 'Interactions-Based Models', in Handbook of Econometrics, Vol. 5, edited by James Heckman and Edward Learner (Amsterdam: North Holland, 2001)
40. and Lawrence Blume and Steven Durlauf, 'Identifying Social Interactions: A Review', in Methods in Social Epidemiology, edited by J.M. Oakes and. J. Kaufman (San Francisco, CA: Jossey-Bass, 2006) for overviews.
41. Charles Manski, 'Identification of Endogenous Social Effects: The Reflection Problem', Review of Economic Studies 60 (1993): 531-42.
42. James Heckman, 'Micro Data, Heterogeneity, and the Evaluation of Public Policy', Journal of Political Economy 109 (2001): 673-748, provides a brilliant overview of his work.
43. E. Anderson makes similar criticisms of the claim that diversity inherently adds to educational quality. See Elizabeth Anderson, integration, Affirmative Action, and Strict Scrutiny', NYU Law Review 77 (2002): 1195-271
44. and Elizabeth Anderson, 'Racial Integration as a Compelling Interest', Constitutional Commentary 21 (2004): 101-27.
45. Samuel Sommers, 'On Racial Diversity and Group Decisionmaking: Identifying Multiple Effects of Racial Composition on Jury Deliberation', Journal of Personality and Social Psychology 90 (2006): 597-612.
46. P. Gurin explains these findings as 'primarily because the quality of interracial contacts is a key determinant of many of these educational outcomes', with no explanation as to why this is sufficient to explain the absence of evidence. See Patricia Gurin 'The Compelling Need for Diversity in Higher Education', Testimony in Gratz, et al. v. Bollinger, and Grutter, et al. v. Bollinger, et al., http://www.vpcomm.umich.edu/admissions/research/ expert/studies.html.
47. A recent semipopular book, Scott Page, The Difference (Princeton, NJ: Princeton University Press, 2007) contains a large number of citations of studies purporting to find efficiency effects, but this compilation of evidence is unfortunately done in a polemical fashion, with no effort seriously to evaluate the studies either on their own terms or in terms of how they may be extrapolated to justify his grandiose claims about the benefits of diversity. Diversity effects are a type of social interaction and are subject to the statistical difficulties I have described.
48. For example, see Miriam Komaromy, Kevin Grumbach, Michael Drake, Karen Vranizan, Nicole Lurie, Dennis Keane and Andrew Bindman, 'The Role of Black and Hispanic Physicians in Providing Health Care for Underserved Populations', New England Journal of Medicine 334 (1996): 1305-10.
49. This importance of evaluating the effects of a factor such as the ethnic composition of doctors from an equilibrium-matching perspective has long been known in economics. Gary Becker, The Economics of Discrimination (Chicago, IL: University of Chicago Press, 1957) is the classic reference.
50. Martin Stinson and Norman Thurston, 'Racial Matching Among African-American Physicians and Hispanic Patients', Journal of Human Resources, 37 (2002): 410-28.
51. James Heckman and Peter Siegelman, 'The Urban. Institute Audit Studies: Their Methods and Findings', in Clear and Convincing Evidence, edited by M. Fix and R. Struyk (Washington DC: Urban Institute Press, 1993);
52. James Heckman, 'Detecting Discrimination', Journal of Economic Perspectives 12 (1998): 101-16;
53. and Robert Bohnholz and James Heckman, 'Measuring the Disparate Impacts and Extending Disparate Impact Doctrine to Organ Transplantation', Perspectives in Biology and Medicine 48 (2005): S95-S122.
54. See Bok and Bowen, The Shape of the River,
55. and Sigal Alon and Marta Tienda, 'Assessing the "Mismatch" Hypothesis: Differences in College Graduation Rates by Institutional Selectivity', Sociology in Education 78 (October 2005): 294-315.
56. Linda Datcher-Loury and David Garman, 'College Selectivity and Earnings', Journal of Labor Economics 31 (1995): 289-308.
57. Richard Sander, 'A Systematic Analysis of Affirmative Action in Law Schools', Stanford Law Review 57 (2004): 367-484.
58. See Ian Ayres and Richard Brooks, 'Does Affirmative Action Reduce the Number of Black Lawyers?', Stanford Law Review 57 (2004): 1807-54;
59. Jesse Rothstein and Albert Yoon, 'Mismatch in Law School', mimeo (Princeton University, 2006);
60. and Jesse Rothstein and Albert Yoon, 'Affirmative Action in Law School Admissions: What Do Racial Preferences Do?' mimeo (Princeton University, 2007).
61. Justin McCrary, 'The Effect of Court-Ordered Quotas on the Composition and Quality of Police', American Economic Review 97 (2007): 318-53;
62. John Lott, 'Does a Helping Hand Put Others At Risk? Affirmative Action, Police Officers, and Crime', Economic Inquiry 38 (2000): 239-76.
63. David Sklansky, 'Not Your Father's Police Department: Making Sense of the New Demographics of Law Enforcement', Journal of Criminal Law and Criminology 96 (2006): 1209-43.
64. Notice that rational behavior, as I have defined it, can be influenced by factors such as peer group and role model effects, limited information about the future, and so on.
65. Durlauf and Seshadri, 'Is Assortative Matching Efficient?'
66. Stephen. Coate and Glenn Loury, 'Will Affirmative-Action Policies Eliminate Negative Stereotypes?', American Economic Review 83 (1993): 1220-40.
67. Kim Sau Chung, 'Affirmative Action as an Implementation Problem', mimeo (Northwestern University, 1999).
68. A well known defense is Judith Thomson, 'Preferential Hiring', Philosophy and Public Affairs 2 (1973): 364-38.
69. Robert Amdur, 'Compensatory Justice: The Question of Costs', Political Theory 7 (1979): 229-44 is a valuable discussion of the merits of such claims.
70. John Ogbu, Black Students in an Affluent Suburb (Mahwah, NJ: Lawrence Erlbaum Associates, 2003).
71. George Akerlof and Rachel Kranton, 'Economics and Identity', Quarterly Journal of Economics 115 (2000): 715-53;
72. Hanming Fang and Glenn Loury, 'Toward an Economic Theory of Dysfunctional Identity', in The Social Economics of Poverty: On Identity, Communities, Groups and Networks, edited by Chris Barrett (London: Routledge, 2005).
73. Race is also a separate and significant factor. See Douglas Massey and Nancy Denton, American Apartheid (Cambridge, MA: Harvard University Press, 1993).
74. Steven Durlauf, 'The Memberships Theory of Inequality: Ideas and Implications', in Elites, Minorities, and Economic Growth, edited by E. Brezis and P. Temin (Amsterdam: North Holland, 1999), pp. 161-78;
75. Steven Durlauf, 'The Memberships Theory of Poverty: The Role of Group Affiliations in Determining Socioeconomic Outcomes', in Understanding Poverty in America, edited by S. Danziger and R. Haveman (Cambridge, MA: Harvard University Press, 2001), pp. 392-416.
76. I provide a defense of this broad claim in Steven. Durlauf, 'Assessing Racial Profiling', Economic Journal 116 (2006): F402-F426.
77. I defend this claim about the state of empirical evidence in Steven Durlauf, 'Groups, Social Influences, and Inequality: A Memberships Theory Perspective on Poverty Traps', in Poverty Traps, edited by S. Bowles, S. Durlauf, and K. Hoff (Princeton, NJ: Princeton University Press, 2006), pp. 141-75.
78. Steven Durlauf, 'Neighborhood Effects', in Handbook of Regional and Urban Economics, Vol. 4, edited by J.V. Henderson and J.-F. Thisse (Amsterdam: North Holland, 2004) surveys the empirical literature.
79. Formally, this model may be thought of as treating both equity and efficiency payoffs as the sum of observable and unobservable components; without loss of generality, I think of the observables and unobservables as independent of each other in the probabilistic sense.
80. A useful reference on discrete choice analysis is Simon Anderson, Andrea de Palma, and Jacques-Francois Thisse, Discrete Choice Theory of Product Differentiation (Cambridge, MA: MIT Press, 1992).
81. Ellis Cose, Rage of a Privileged Class (New York: Harper Collins, 1993).
82. Lars P. Hansen and Thomas Sargent, Robustness (Princeton, NJ: Princeton University Press, 2007) provides a deep reanalysis of many macroeconomic questions from the perspective of ambiguity using minimax ideas.
83. Charles Manski, Identification for Prediction and Decision (Cambridge, MA: Harvard University Press, 2007) summarizes his important work in microeconomics using minimax regret.
84. Durlauf, 'Groups, Social Influences, and Inequality: A Memberships Theory Perspective on Poverty Traps', pp. 141-75.
85. Gerald Gaus, 'Social Complexity and Evolved Moral Principles'.
86. John Roemer, 'Three Egalitarian Views and American Law', Law and Philosophy 20: (2001), 433-460 specifically discusses affirmative action.
87. See also John Roemer, Equality of Opportunity (Cambridge, MA: Harvard University Press, 1998) for a lovely summary of his thought.
88. The division between predictable and unpredictable equity payoffs is artificial in the sense that one can interpret violations of my assumptions as meaning either that the predictable parts have a different sign or that the unpredictable parts do not have a mean of 0. My arguments do not depend on which way one thinks about the violations.
89. My own attempts to justify this presumption may be found in Durlauf, 'Groups, Social Influences, and Inequality: A Memberships Theory Perspective on Poverty Traps' and Durlauf, 'Assessing Racial Profiling'.