Affirmative Action and Human Capital Investment: Evidence from a Randomized Field Experiment

The empirical literature on Affirmative Action (AA) in college admissions tends to ignore the effects admissions policies have on incentives of students to invest developing pre-college human capital. We explore the incentive effects of AA using a field experiment that creates a microcosm of the college admissions market. Our experimental design is based on the asymmetric, multi-object, all-pay auction framework in Bodoh-Creed and Hickman (2014). We pay 5th through 8th grade students based on their performance on a national mathematics exam relative to other competitor students, and observe the use of a study website as students prepare for the exam. An AA treatment favors "disadvantaged" students by reserving prizes for lower grade students who on average have less mathematics training and practice. We find that the AA policy significantly increases both average time investment and subsequent math achievement scores for disadvantaged students. At the same time, we find no evidence that it weakens average human capital investment incentives for advantaged students. We also find strong evidence that AA can narrow achievement gaps while promoting greater equality of market outcomes.