Preferential College Admissions for the Disadvantaged: The Role of Social Mechanisms and Subjective Beliefs” with F. Kosse and E. Miglino

Abstract:

Many countries use preferential college admissions to provide opportunities to talented disadvantaged students. Exploiting a randomized experiment in Chile, we find that preferential admissions increased college admissions and enrollments of the disadvantaged by a third, but admission effects were 60% lower than expected; this gap was more pronounced for high-ability students. Using linked survey-administrative data, we empirically test for social incentives, biases in subjective beliefs about ability, and disutility from preferential seats (stigma) as potential mechanisms. We find support for the last two. We then develop and structurally estimate a dynamic model incorporating them. We find that stigma explains 36% of the admissions gap. Belief biases do not explain the gap on average, but they help explain its widening with ability: by distorting pre-college effort investments, widespread overoptimism compressed (amplified) the admissions of high- (low-)ability students. Therefore, we identified frictions that can prevent preferential admissions from achieving their intended objective.