On Why Affirmative Action May Never End and Why it Should

Successive welfare-maximizing governments must decide whether to implement an affirmative action policy. This policy is purported improve the performance distribution of a targeted group (minority or otherwise), although this improvement becomes trivial when implemented over long period time. Employers pay workers according their expected productivity, but without (perfectly) observing they benefited from not. has depressing effect on wages non-beneficiaries (whether not belong group), leading in turn feeling injustice. We find that perpetually choose policy, even though overall injustice worse than beneficial (which marginal time). The explanation we propose based novel moral hazard argument: Each government's actual decision observed by market participants and thus no direct wages. Governments therefore do internalize choosing it. outcome sharp contrast with first-best, plan, which end after certain number periods, small enough.