Affirmative action is often criticized for causing reverse discrimination and lowering the qualifications of those hired under the policy. However, the magnitude of such adverse effects depends on whether the best suited candidate is hired absent the policy. Indeed affirmative action may compensate for the distortion discrimination imposes on the selection of candidates. This paper asks whether affirmative action can have a similar corrective impact when qualified individuals fail to apply for a job. We evaluate the effect of introducing a gender quota in an environment where high-performing women fail to enter competitions they can win. We show that guaranteeing women equal representation among winners increases their entry. The response exceeds that predicted by the change in probability of winning and is in part driven by women being more willing to compete against other women. The consequences are substantial as the boost in supply essentially eliminates the anticipated costs of the policy.
Performance: Number of correct answers during each Task. Selection into piece-rate or tournament pay schemes: For Tasks 3, 4, 5, and 6, subjects are asked which pay scheme they prefer to enter/apply.
Affirmative action causes a large increase in the tournament entry by women and a decrease in the entry by men. Although some high-performing men drop out of the competition, many women come in, and the overall number of high-performing participants in the entry pool is barely affected. This change in the gender composition of the applicant pool causes the observed performance costs to be substantially smaller than predicted. The performance requirements for men and women are essentially the same under affirmative action, and there is limited or no reverse discrimination.