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Affirmative Action in Higher Education: How Do Admission and Financial Aid Rules Affect Future Earnings?

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Author Info
Peter Arcidiacono

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Abstract

This paper addresses how changing the admission and financial aid rules at colleges affects future earnings. I estimate a structural model of the following decisions by individuals: where to submit applications, which school to attend, and what field to study. The model also includes decisions by schools as to which students to accept and how much financial aid to offer. Simulating how black educational choices would change were they to face the white admission and aid rules shows that race-based advantages had little effect on earnings. However, removing race-based advantages does affect black educational outcomes. In particular, removing advantages in admissions substantially decreases the number of black students at top-tier schools, while removing advantages in financial aid causes a decrease in the number of blacks who attend college. Copyright The Econometric Society 2005.

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File URL: http://hdl.handle.net/10.1111/j.1468-0262.2005.00627.x
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Publisher Info
Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 73 (2005)
Issue (Month): 5 (09)
Pages: 1477-1524
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Handle: RePEc:ecm:emetrp:v:73:y:2005:i:5:p:1477-1524

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  1. Mario Fiorini, 2008. "Fostering Educational Enrolment Through Subsidies: The Issue of Timing," Working Paper Series 157, School of Finance and Economics, University of Technology, Sydney. [Downloadable!]
  2. Peter Arcidiacono & Patrick Bayer & Aurel Hizmo, 2008. "Beyond Signaling and Human Capital: Education and the Revelation of Ability," NBER Working Papers 13951, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Beffy, Magali & Fougère, Denis & Maurel, Arnaud, 2009. "Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter?," IZA Discussion Papers 4127, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Peter Arcidiacono, Holger Sieg, Frank Sloan, 2001. "Living Rationally Under the Volcano? Heavy Drinking and Smoking Among the Elderly," Computing in Economics and Finance 2001 207, Society for Computational Economics. [Downloadable!]
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