TRACING THE EFFECTS OF GUARANTEED ADMISSION THROUGH THE COLLEGE PROCESS: EVIDENCE FROM A POLICY DISCONTINUITY IN THE TEXAS 10% PLAN

The Texas 10% law states that students who graduated among the top 10% of their high school class are guaranteed admission to public universities in Texas. We estimate the causal effects of this admissions guarantee on a sequence of connected decisions: students' application behavior, admission decisions by the university, students' enrollment choices conditional on admission; as well as the resulting college achievement. We identify these effects by comparing students just above and just below the top 10% rank cut off. We assume that other student characteristics and incentives are continuous at this cut off. We find that students react to incentives created by the admissions guarantee—for example, by reducing applications to competing private universities. The effects of the admissions guarantee depend on the university and the type of students it attracts. The 10% law is binding and alters the decisions of the admissions committees. We find little evidence that the law increases diversity or leads to meaningful mismatch for the marginal student admitted. (JEL I23, I28)     

Competitive screening and information transmission

We consider a model in which schools and colleges compete for high-ability students, which are independently identified through a costly screening procedure. This independence creates a channel through which students' preferences affect the strategic interaction between schools: students with competing offers accept the most-preferred one, increasing the screening costs of unpopular schools. When preferences between schools are more heterogeneous, schools screen more, increasing the proportion of students with multiple offers, but paradoxically reducing the extent to which their preferences determine their outcomes. By observing the students' schools of origin, colleges can free-ride of the fierce competition that occurs during screening.     

GAMING A SELECTIVE ADMISSIONS SYSTEM

A university uses both early-stage selection outcome (high-school affiliation) and late-stage admission test outcome (standardized test scores) to select students. We use this model to study policies that have been proposed to combat inefficient gaming in college admissions. Increasing university enrollment size can exacerbate gaming and worsen the selection outcome. Abolishing standardized tests for university admissions increases gaming targeting high-school admissions and worsens the selection outcome, whereas eliminating high-school ability sorting may improve the university selection outcome under some cost conditions of gaming. Committing to a lower-powered selection scheme can improve the selection outcome by reducing gaming behaviors.     

Political connections and higher education

Do political connections affect investment in human capital? This paper studies the higher education decisions of politically connected and unconnected students during China's economic transition. Using the sequential introduction of reforms, I show that economic liberalization increased tertiary educational attainment, as well as sorting of students into different degree types depending on family background. Students whose parents were members of the Chinese Communist Party selected into relatively less prestigious vocational colleges with lower admissions standards. In contrast, politically unconnected individuals responded to the higher skill premium following the reforms by studying harder to obtain more demanding and sought‐after university degrees.     

Early decision and financial aid competition among need-blind colleges and universities

This paper presents a stylized theoretical model of competition among need-blind colleges and universities that implement early decision admissions. Under need-blind admissions, an applicant's financial aid status cannot affect their likelihood of admission. In the model, a need-blind school can use early decision admissions as a screening mechanism to indirectly identify a student's ability-to-pay, while superficially maintaining a need-blind policy. As a result, in equilibrium, non-financial aid students are more likely to be admitted than financial aid students of comparable quality.     

Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression–Discontinuity Approach*

An important problem faced by colleges and universities, that of evaluating the effect of their financial aid offers on student enrollment decisions, is complicated by the likely endogeneity of the aid offer variable in a student enrollment equation. This article shows how discontinuities in an East Coast college's aid assignment rule can be exploited to obtain credible estimates of the aid effect without having to rely on arbitrary exclusion restrictions and functional form assumptions. Semiparametric estimates based on a regression–discontinuity (RD) approach affirm the importance of financial aid as an effective instrument in competing with other colleges for students.     

ENROLLMENT AT HIGHLY SELECTIVE PRIVATE COLLEGES: WHO IS LEFT BEHIND?

This study examines the enrollment decisions of freshmen applicants to highly selective private colleges relative to highly selective public colleges. The empirical analysis shows that college enrollment varies by family income—in particular, low-income students with demonstrated financial need are less likely to enroll at private colleges, controlling for other factors including race and financial aid. Grant aid tends to have a moderating effect but the amount of aid under the existing college pricing and financial aid system appears to be inadequate. This finding provides support for recent revamping of financial aid offerings to low-income students by some highly selective private colleges. In addition, the results suggest that while family income appears to be a strong determinant of enrollment at these colleges, race does not seem to play a role . ( JEL I21)     

Competition between Employed and Unemployed Job Applicants: Swedish Evidence*

We use the Swedish Applicant Database to investigate empirically whether being unemployed per se reduces the probability of getting contacted by a firm. All searchers looking for a new job are invited to submit their personal details to this database over the internet. Since we have access to exactly the same information as the firms, we can minimize the problems associated with unobserved heterogeneity. Our results show that an unemployed applicant faces a lower contact probability than an otherwise identical employed applicant, thus supporting the notion that firms view employment status as a signal of productivity.     

New Evidence on the Effects of the Shortened School Duration in the German States: An Evaluation of Post‐secondary Education Decisions

Most German states have recently reduced the duration of university preparatory schooling from 13 to 12 years without changing the graduation requirements. We use nationwide data on high school graduates and the different timing of reform introduction in the federal states to identify the effects on post‐secondary education decisions and to evaluate potential effect mechanisms. The results show that university enrolment of female students decreased in the first year after graduation in all analyzed states, whereas participation in voluntary service or staying abroad increased. Furthermore, students from non‐academic families are more affected than students from an academic family background.     

A Remark on Color‐Blind Affirmative Action

Faced with legal challenges to explicitly race‐contingent admissions policies, elite educational institutions have turned to criteria that meet diversity goals without being formally contingent on applicant identity. We establish that under weak conditions that apply generically, such color‐blind affirmative action policies must be nonmonotone, in the sense that within each social group, some students with lower scores are admitted while others with higher scores are denied. In addition, we argue that blind rules can generate greater disparities in mean scores across groups conditional on acceptance than would arise if explicitly race‐contingent policies were permitted.     

Does college football impact the size of university applicant pools and the quality of entering students?

The role played by collegiate athletics in furthering the mission of institutions of higher education has been one of the more active research streams in the economics literature. Two areas of emphasis in this particular genre concern the relationship between athletics success and the size of a university’s applicant pool, and the relationship between athletics success and the quality of a university’s incoming class. This study extends both lines of research above by employing a unique panel data set consisting of 10 institutions that either added or eliminated college football between 1997 and 2015 in order to examine the impact of the presence of college football programme on both the size of university applicant pools and the quality of the students chosen for admission. Results from a panel data estimator presented here suggest that the size of their applicant pool shrinks the year following discontinuation of a college football programme. In the case of ACT scores, the results are similar, indicating that the ACT scores of incoming freshmen decrease after discontinuation of football.     

HIGH SCHOOLS AND STUDENTS' INITIAL COLLEGES AND MAJORS

We use statewide administrative data from Missouri to examine the explanatory power of high schools over student sorting to colleges and majors at 4‐year public universities. We develop a “preparation and persistence index” (PPI) for each university‐by‐major cell in the Missouri system that captures dimensions of selectivity and rigor and allows for a detailed investigation of sorting. Our analysis shows that students' high schools predict the quality of the initial university, as measured by PPI, conditional on their own academic preparation, and that students from lower–socioeconomic status high schools systematically enroll at lower‐PPI universities. However, high schools offer little explanatory power over major placements within universities. (JEL I2, J1)     

ON THE DETERMINANTS OF EDUCATIONAL CORRUPTION: THE CASE OF UKRAINE

This article utilizes a unique data set to examine the relationship between a group of potential explanatory variables and educational corruption in Ukraine. Our corruption controls include bribing on exams, on term papers, for credit, and for university admission. We use a robust nonparametric approach in order to estimate the probability of bribing across the four different categories. This approach is shown to be robust to a variety of different types of endogeneity often encountered under commonly assumed parametric specifications. Our main findings indicate that corruption perceptions, past bribing behavior, and the perceived criminality of bribery are significant factors for all four categories of bribery. From a policy perspective, we argue that when bribe control enforcement is difficult, anti‐corruption education programs targeting social perceptions of corruption could be appropriate. (JEL K42, J16, C14)     

Comparing Environmental Policy Instruments in the Presence of Imperfect Compliance – A Case Study

In this paper, we aim to include rule making, implementation, monitoring and enforcement costs into the cost comparison of policy instruments. We use a simple partial equilibrium model and apply it to the textile industry. The model includes discrete abatement functions and costly monitoring and enforcement. The case study uses individual firm data to simulate the differences in abatement costs and compliance decisions between firms. We compare combinations of regulatory instruments (emission taxes, emission standards and technology standards) and enforcement instruments (criminal fines, civil fines and transaction offers). We show that the inclusion of information, monitoring and enforcement costs indeed alters the relative cost efficiency of the different instruments.     

The Italian Banking Structure in the 1990s: Testing the Multimarket Contact Hypothesis

The multimarket contact hypothesis holds that more contacts between firms competing in the same markets may induce more collusion. This paper tests the hypothesis for the Italian banking market, analysing the behaviour of the largest Italian banks from 1990 to 1996. Market rivalry is gauged by changes in loan market shares and interest rates in each Italian province. We estimate the effects of increasing multimarket contacts, concentration indicators, banks' costs and loan demand on variations in market shares and interest rates. No support is found for the multimarket contact hypothesis. Geographical overlap in banking is positively correlated with changes in market shares, confirming the thesis of an overall increase in competition within the Italian banking system. Greater multimarket links also seem to correspond to lower lending rates.
(J.E.L.:G21, C33, L40.)     

多市场接触对新市场进入及绩效的影响 ——基于10家股份制商业银行的研究

企业在多个市场的竞争互动构成了多市场接触,相较传统的竞争研究,多市场接触更为真实、动态地反映了企业竞争的实际局面。本文以中国10家股份制商业银行为研究对象,研究了多市场接触对银行进入竞争对手所在市场可能性的影响,资源相似性和影响范围在其中发挥的调节作用以及多市场接触对银行绩效的影响。实证结果表明：公司进入竞争对手所在市场的可能性随着多市场接触水平的提升而增大,但偶然形成的多市场接触则与其不相关;相较低资源相似性的公司而言,高资源相似性的公司多市场接触水平对新市场进入的作用将更强;当公司之间是互换性的多市场接触时,多市场接触对新市场进入的作用将减弱;当其他要素保持不变时,公司的绩效随着多市场接触水平的提升而提升。     

The negative effect of NCAA football bowl bans on university enrolment and applications

Universities provide consumption amenities to students in addition to their educational services. Collegiate sports programs have been characterized as one of these consumption amenities. Previous research has shown that athletic success has a positive impact on both the quantity and quality of students attending a university. Alternatively, we analyse if athletic malfeasance, as measured by NCAA postseason bans of football programs, negatively affects either the quantity or quality of student applications or enrolment. Our findings suggest that athletic malfeasance that results in a postseason football bowl ban lowers the quantity of applications, admittances and enrolment to a university. In addition, we find that universities respond to decreased application numbers by increasing their admission rates, while students who are admitted to the school enrol at the same rate as before the ban. Thus, the reduced enrolment is the result of a smaller applicant pool and not the result of a lower rate of enrolment. Lastly, we do not detect any reduction in student quality at the sanctioned university. Our results demonstrate that impropriety by an athletics program directly impacts a university’s non-athlete student enrolment by influencing the amenity mix provided by the university.     

A better job thanks to personal networks? An evaluation for migrants who arrived in France before age 18

It is more difficult for migrants than natives to find a job in their host country, so many of them have to accept, at least temporarily, a job that is below their level of qualification. This represents a waste of human capital for society and can undermine social cohesion. Relying on social relationships might help them to bypass some of the obstacles that prevent them from finding a job that matches their skillset. We focus on migrants who arrived in France before the age of 18 years, who were educated entirely or partially in France. We use the rich French Trajectories and Origins dataset for 2009 to study the impact of personal contacts on the quality of the current employment. We measure the job quality using an indicator based on the educational requirement for a given occupation. To address the endogeneity between our dependent variable (holding a suitable job or not) and the variable of interest (employment found through a personal contact or not), we use the variable ‘sibling(s) in France’ as an instrument: this variable influences an individual’s probability of finding a job through contacts but does not influence directly the quality of the employment. Our results indicate that for these migrants, finding a job through personal contacts strongly and positively impacts the occupational status attained: it raises both women’s and men’s probability of holding a suitable job by more than 0.40 points.     

Information Manipulation in Election Campaigns

We provide a game‐theoretical model of manipulative election campaigns with two political candidates and a Bayesian voter. The latter is uncertain about how good the candidates are. Candidates take unobservable, costly actions to manipulate voter's opinion about their positions. We show that if the candidates differ in campaigning efficiency, and the voter receives the biased campaign messages with some noise, then the cost‐efficient candidate can win the election with higher probability than her opponent even when she is ex‐post an inferior choice for the voter. Our paper offers a novel informational justification for imposing limits on campaign spending and encouraging diversity in the supply of political information.