This paper provides a simple explanation for why some minority groups are economically successful, despite being subject to government-mandated discriminatory policies. We study an economy with private and public sectors in which workers invest in imperfectly observable skills that are important...

We argue that once we take into account the students' rational enrollment decisions, mismatch in the sense that the intended beneficiary of affirmative action admission policies are made worse off could occur only if selective universities possess private information about students'...