Income-Based Affirmative Action in College Admissions

Bibliographic Data

ID9710674
AuthorsLuiz Brotherhood (0000-0002-7614-1980, Universitat de Barcelona and BEAT, Spain, and FGV EPGE , Brazil), Bernard Herskovic (Anderson School of Management, University of California, Los Angeles, USA, and National Bureau of Economic Research , USA, corresponding author), João Ramos (0000-0001-6458-375X, Marshall School of Business at the University of Southern California , USA)
Year2023
Volume133
Issue653
Pages1810-1845
Publication date2023-06-10
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ej/uead016
OpenAlexW4318941834
LanguageEN
References cited26

We study whether college admissions should implement quotas for lower-income applicants. We develop an overlapping-generation model and calibrate it to data from Brazil, where such a policy is widely implemented. In our model, parents choose how much to invest in their child’s education, thereby increasing both human capital and likelihood of college admission. We find that, in the long run, the optimal income-based affirmative action increases welfare and aggregate output. It improves the pool of admitted students, but distorts pre-college educational investments. The welfare-maximising policy benefits lower- to middle-income applicants with income-based quotas, while higher-income applicants face fiercer competition in college admissions. The optimal policy reduces intergenerational persistence of earnings by 5.7% and makes nearly 80% of households better off

Affirmative action · Competition (biology · Demographic economics · Earnings · Economic growth · Economics · Higher education · Human capital · Labour economics · Political science · Welfare · Finance · Intergenerational and Educational Inequality Studies · Labor market dynamics and wage inequality · School Choice and Performance

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