The Market-Distorting Effects of Current Affirmative Action Policies


There are many good reasons both politically and philosophically that Affirmative Action as it is currently practiced is a bad idea, most of which have been covered here before. But in an interesting article at RCP yesterday, Heather Wilhelm raised an important salient point that I hadn’t yet considered:

With so many oddities in the public school system, it’s hard to know where to start. Across the country, arbitrarily drawn school district lines radically distort real estate markets. Anyone who has shopped for a house in the United States knows one sad truth: Better school districts command a steep premium. (The other truth, it seems, is that you probably won’t like the kitchen.) Despite our government’s lofty rhetoric of free and equal public education, the fact remains that better-off families can buy their way into better schools.

I think that many people can get behind the idea that kids who come from disadvantaged homes and are trapped in inferior school districts with parents who might be less likely to be able to help their kids’ education at home ought to get a leg up in our education system. The problem with solely race-based Affirmative Action policy is that it is lazy and inaccurate. Race is a very imperfect proxy for capturing actual educational disadvantages and many non-minority kids who live in abject poverty and abominable educational districts get left behind.

One of the further problems illustrated above is that the current policy creates a self-perpetuating cycle where “good” schools artificially distort real estate markets towards higher prices, thus pricing all but the richest kids out of attending them, which exacerbates the problem in a cycle. One more thoughtful substitute for affirmative action that has been proposed by many is a program that would assign to each student within a school district an advantage score of some kind, where kids who have to come up through poorer school districts are those who receive the advantage in question, regardless of race. This would presumably have the effect of reducing at least some of the market distortion presented by current school districting and might actually incentivize some repopulation of currently economically blighted areas. If your kid’s educational future won’t be automatically condemned because of his school district, the incentive to choose location based on school district would be greatly lessened.

This proposal is not without its potential pitfalls, most important of which is the problem of how to prevent school districts from permanently sandbagging in order to actually attract students by virtue of higher performance bonuses. It would doubtless create a perverse incentive on the part of parents to actually hope that a school district as a whole performed worse (while their own particular child performed better). Some manner of standards-based “stick” would doubtless need to be applied to the districts in question to avoid the “carrot” of having students get rewarded during college admission for the district’s poor performance.

But these policy challenges are not insurmountable and are better than the current system which distorts the market, leaves deserving kids in the lurch, and continues to breed resentment and the “soft bigotry of low expectations.”

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