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The Effect of the Increasing Demand for Elite Schools on Stratification

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  • Estrada, Ricardo

Abstract

I use detailed applications data to document a case in which, contrary to prevailing concerns, increasing school stratification by ability co-existed with stable stratification by family income: Mexico City public high schools. To understand this puzzle, I develop a model that shows that the effect of an overall increase in the demand for elite schools on school stratification by family income is a horse race between the correlations of family income and ability, and family income and demand. My empirical analysis reveals an initial (and decreasing) demand gap by family income that explains the observed stability in stratification.

Suggested Citation

  • Estrada, Ricardo, 2017. "The Effect of the Increasing Demand for Elite Schools on Stratification," Research Department working papers 1065, CAF Development Bank Of Latinamerica.
    • Handle: RePEc:dbl:dblwop:1065
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    References listed on IDEAS

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    1. John Bound & Brad Hershbein & Bridget Terry Long, 2009. "Playing the Admissions Game: Student Reactions to Increasing College Competition," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 119-146, Fall.
    2. Estrada, Ricardo & Gignoux, Jérémie, 2017. "Benefits to elite schools and the expected returns to education: Evidence from Mexico City," European Economic Review, Elsevier, vol. 95(C), pages 168-194.
    3. Christopher Avery & Parag A. Pathak, 2021. "The Distributional Consequences of Public School Choice," American Economic Review, American Economic Association, vol. 111(1), pages 129-152, January.
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    5. Caroline M. Hoxby, 2009. "The Changing Selectivity of American Colleges," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 95-118, Fall.
    6. Ricardo Estrada & Jérémie Gignoux, 2014. "Benefits to elite schools and the formation of expected returns to education: Evidence from Mexico City," PSE Working Papers halshs-00951763, HAL.
    7. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    8. Parag A. Pathak, 2011. "The Mechanism Design Approach to Student Assignment," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 513-536, September.
    9. Justine S. Hastings & Jeffrey M. Weinstein, 2008. "Information, School Choice, and Academic Achievement: Evidence from Two Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1373-1414.
    10. Amanda Pallais, 2015. "Small Differences That Matter: Mistakes in Applying to College," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 493-520.
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    12. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
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    Cited by:

    1. Estrada, Ricardo, 2022. "The effect of the demand for elite schools on stratification," Economics Letters, Elsevier, vol. 215(C).
    2. Chen, Li & Sebastián Pereyra, Juan, 2019. "Self-selection in school choice," Games and Economic Behavior, Elsevier, vol. 117(C), pages 59-81.

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    More about this item

    Keywords

    Educación; Economía; Investigación socioeconómica;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • D59 - Microeconomics - - General Equilibrium and Disequilibrium - - - Other

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