School Choice Priorities and School Segregation: Evidence from Madrid

We test how government-determined school choice priorities affect families’ choices and pupil sorting across schools in the context of the Boston Mechanism. We use two large-scale school choice reforms in the school choice priority structure undertaken in the region of Madrid (Spain) in 2012 and 2013 as a source of variation. In 2012, low-income priorities to the top- ranked school were reduced, and points to alumni family members of the top-ranked school were granted. In 2013, an inter-district school choice reform widely expanded families’ choice set of schools. We combine an event study first difference across cohorts and a Difference- in-Difference design to identify the impact of the reforms, using unique administrative data on parents’ applications to schools. We show that reducing low-income priorities to the top-ranked school and granting points to alumni family members of the top-ranked school increases school segregation by parental education and immigrant status on 3 and 13 percent, respectively. Families reacted to the 2013’s inter-district reform exerting higher interdistrict choice and applying to schools located further away from home than before the reform. We find heterogeneous effects, showing potential information gaps and dynamic learning process across immigrant status groups throughout time. Moreover, the inter-district school choice reform marginally reduced school segregation by parental education and largely increased school segregation by immigrant status, but both effects fade out when controlling for residential stratification. Results suggest that priority structures need to be carefully designed to achieve diversity objectives and that abolishing school choice proximity points does not seem an effective public policy for reducing school segregation under the Boston Mechanism.