This paper explores the economics of diversity-enhancing policies. A model is proposed in which heterogeneous agents, distinguished by skill level and social identity, purchase productive opportunities in a competitive market. We analyze policies designed to raise the status of a disadvantaged...

For more than three decades, critics and supporters of affirmative action have fought for the moral high ground through ballot initiatives and lawsuits, in state legislatures, and in varied courts of public opinion. The goal of this paper is to show the clarifying power of economic reasoning to...