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  5. College Returns and the Role of Centralized Assignment Mechanisms
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College Returns and the Role of Centralized Assignment Mechanisms

Paper Session

Sunday, Jan. 8, 2023 1:00 PM - 3:00 PM (CST)

Hilton Riverside, Canal
Hosted By: American Economic Association
  • Chair: Seth Zimmerman, Yale University

Dynamic College Admissions

Tomas Larroucau
,
Arizona State University
Ignacio Rios
,
University of Texas-Dallas

Abstract

We study the relevance of incorporating dynamic incentives and eliciting private information about students’ preferences to improve their welfare and downstream outcomes in centralized assignment mechanisms. Using administrative data and two nationwide surveys, we identify two behavioral channels that largely explain students’ dynamic decisions: (i) initial mismatches and (ii) learning. Based on these facts, we build and estimate a structural model of students’ college progression in the presence of a centralized admission system, allowing students to
learn about their match quality over time and reapply to the system. We use the estimated model to analyze the impact of changing the assignment mechanism and reapplication rules on the efficiency of the system. Our counterfactual results show that policies that provide score bonuses that elicit information on students’ cardinal preferences and leverage dynamic incentives can significantly decrease switching and increase students’ overall welfare.

Affirmative Action in Centralized College Admission Systems

Sebastian Otero
,
University of California-Berkeley
Nano Barahona
,
University of California-Berkeley
Cauê Dobbin
,
CEMFI

Abstract

This paper empirically studies the distributional consequences of affirmative action in the context of a centralized college admission system. We examine the effects of a large-scale program in Brazil that mandated all federal public institutions to reserve half their seats for public high school students, prioritizing those from socioeconomically and racially marginalized groups. After the policy was put in place, the representation of public high school students of color in the most selective federal degrees increased by 73%. We exploit degree admission cutoffs to estimate the effects of increasing affirmative action by one reserved seat on the quality of the degree attended four years later. Our estimates indicate that the gains for benefited students are 1.6 times the costs experienced by displaced students. To study the effects of larger changes in affirmative action, we estimate a joint model of school choice and potential outcomes. We identify the parameters of the model using exogenous variation in test scores—arising from random assignment to graders of varying strictness—that changes the availability of degrees for otherwise identical individuals. We find that the policy creates impacts on college attendance and persistence that imply overall income gains of 1.16% for the average targeted student, and losses of 0.93% for the average non-targeted student. Overall, the policy prompted a negligible increase in predicted income of 0.1% across all students in the population. Taken together, we find that the affirmative action policy had important distributional consequences, which resulted in almost one-to-one transfers from the non-targeted to the targeted group. These results indicate that introducing affirmative action can increase equity without affecting the overall efficiency of the education system.

Top Percent Policies and the Return to Postsecondary Selectivity

Zachary Bleemer
,
Yale University

Abstract

I study the efficacy of test-based meritocracy in college admissions by evaluating the impact of a grade-based “top percent” policy implemented by the University of California. Eligibility in the Local Context (ELC) provided large admission advantages to the top four percent of 2001-2011 graduates from each California high school. I construct a novel longitudinal dataset linking the ELC era’s 1.8 million UC applicants to educational and labor market outcomes. I first employ a regression discontinuity design to show that ELC led over 10 percent of barely-eligible applicants from low-opportunity high schools to enroll at selective UC campuses instead of less-selective public colleges and universities. Half of those participants were from underrepresented minority groups, and their average SAT scores were at the 12th percentile of their UC peers. Instrumental variable estimates show that ELC participants' more-selective university enrollment caused increases in five-year degree attainment by 20 percentage points and annual early-career wages by up to \$25,000. I then analyze ELC's general equilibrium effects by estimating a structural model of university application, admission, and enrollment with an embedded top percent policy. I find that ELC and counterfactual expansions of ELC substantively increase disadvantaged students’ net enrollment at selective public universities. Reduced-form and structural estimates show that ELC participants derived similar or greater value from more-selective university enrollment than their higher-testing peers. These findings suggest that access-oriented admission policies at selective universities can promote economic mobility without efficiency losses.

Discussant(s)
Nikhil Agarwal
,
Massachusetts Institute of Technology
Zachary Bleemer
,
Yale University
Clemence Idoux
,
Massachusetts Institute of Technology
Christopher Campos
,
University of Chicago
JEL Classifications
  • I2 - Education and Research Institutions
  • L0 - General