How Costly Is Diversity? Affirmative Action in Light of Gender Differences in Competitiveness

TLDR

Affirmative action is criticized for reverse discrimination and potentially lowering hired qualifications, but its adverse effects depend on whether the best candidate would be hired without the policy and may actually correct distortions in candidate selection. The study investigates whether affirmative action can correct for the under‑application of qualified individuals. The authors assess the impact of a gender quota in a setting where high‑performing women typically do not enter competitions they could win. Guaranteeing women equal representation among winners raises their participation, exceeding the expected increase from higher win probabilities and partly driven by women’s greater willingness to compete against other women, thereby eliminating the policy’s anticipated costs. The paper was accepted by Uri Gneezy in Behavioral Economics.

Abstract

Affirmative action is often criticized for causing reverse discrimination and lowering the qualifications of those hired under the policy. However, the magnitude of such adverse effects depends on whether the best suited candidate is hired absent the policy. Indeed affirmative action may compensate for the distortion discrimination imposes on the selection of candidates. This paper asks whether affirmative action can have a similar corrective impact when qualified individuals fail to apply for a job. We evaluate the effect of introducing a gender quota in an environment where high-performing women fail to enter competitions they can win. We show that guaranteeing women equal representation among winners increases their entry. The response exceeds that predicted by the change in probability of winning and is in part driven by women being more willing to compete against other women. The consequences are substantial as the boost in supply essentially eliminates the anticipated costs of the policy. This paper was accepted by Uri Gneezy, behavioral economics.