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Studies of compensating discrimination (known in the U.S. as affirmative action) have not accounted for the role of envy. Yet envy affects utility. The author considers the compensating-discrimination policies that individuals acknowledging envy would choose when behind a veil of ignorance. The institutional background for the author's study is India, where low castes have been provided with preferential access to public education and reserved public sector jobs. Although the Indian case is background, the conclusions apply more generally. The author defines envy as occurring when people with the same abilities have different incomes because of unequal education and employment opportunities.
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