"Affirmative action policies are practiced around the world. This paper explores the welfare economics of such policies. A model is proposed where heterogeneous agents, distinguished by skill level and social identity, compete for positions in a hierarchy. The problem of designing an efficient...

Affirmative action policies are practiced around the world. This paper explores the welfare economics of such policies. A model is proposed where heterogeneous agents, distinguished by skill level and social identity, compete for positions in a hierarchy. The problem of designing an efficient...

We examine the mapping of the distribution of ability onto earnings in a hierarchical job assignment model. Workers are assigned to a continuum of jobs in fixed proportions, ordered by sensitivity to ability. The model implies a novel marginal productivity interpretation of wages. We derive...