Who benefits from minority business set-asides? The case of New Jersey

Race-based remedies often are justified by evidence of prior discrimination. They work when they benefit groups previously disadvantaged. This article examines one such remedy - minority business set-asides - and its application in the award of public procurement and construction contracts by the state of New Jersey. Analyzed are contract awards to minority and non-minority/non-women-owned business enterprises in 1990, as well as in periods before, during, and after the imposition of a state minority set-aside program. Using a conventional decomposition approach, the article reveals significant discriminatory gaps in the success of minority-versus non-minority-owned firms in obtaining contracts from the state of New Jersey. The analysis suggests that minority contracting success rates fell from thepre-set-aside era to the setaside era and that discriminatory outcomes persisted. The particular remedy chosen - while justified based on evidence of prior discrimination - appears not to have reduced the original discrimination nor did it unambiguously benefit minority businesses.