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Journal of Law, Economics, and Organization Advance Access published online on December 24, 2007
Journal of Law, Economics, and Organization, doi:10.1093/jleo/ewm053
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© The Author 2007. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

An Economic Analysis of Color-Blind Affirmative Action

Roland G. Fryer, Jr.*

Harvard University and NBER

Glenn C. Loury**

Brown University

Tolga Yuret***

Koc University

* Department of Economics, Harvard University, and NBER. Email: rfryer{at}fas.harvard.edu.

** Department of Economics, Brown University. Email: glenn_loury{at}brown.edu.

*** Department of Economics, Koc University. Email: tyuret{at}ku.edu.tr.

This article offers an economic analysis of color-blind alternatives to conventional affirmative action policies in higher education, focusing on efficiency issues. When the distribution of applicants' traits is fixed (i.e., in the short-run) color blindness leads colleges to shift weight from academic traits that predict performance to social traits that proxy for race. Using data on matriculates at several selective colleges and universities, we estimate that the short-run efficiency cost of "blind" relative to "sighted" affirmative action is comparable to the cost colleges would incur were they to ignore standardized test scores when deciding on admissions. We then build a model of applicant competition with endogenous effort in order to study long-run incentive effects. We show that, compared to the sighted alternative, color-blind affirmative action is inefficient because it flattens the function mapping effort into a probability of admission in the model's equilibrium.

"Implementing race-neutral programs will help educational institutions minimize litigation risks they currently face... . If we are persistent in implementing race-neutral approaches, the end result will be to fulfill the great words of Dr. Martin Luther King Jr., who dreamed of the day that all children will be judged by the content of their character and not the color of their skin."

—US Department of Education. Race-Neutral Alternatives in Postsecondary Education: Innovative Approaches to Diversity, Washington, D.C.: U.S. Department of Education, Office of Civil Rights March 2003, pp. 7, 40.


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