Affirmative Action and Efficiency in Education

This Paper studies the optimal education policy in the presence of different groups of households, with groups differing in the distribution of the ability to benefit from education. The main result is that the high ability individuals from groups with relatively few high ability individuals should receive more education than equally able individuals from groups with a more favourable distribution of abilities. The interpretation of this conclusion is that affirmative action policies can find a rationale on efficiency grounds alone.