The Top-Ten Way to Integrate High Schools

We investigate the effects of "top-N percent" policies in college admission on ethnic diversity at the high-school level. These policies produce incentives for students to relocate to schools with weaker academic competition. We provide theoretical conditions under which such school arbitrage will contribute to the desegregation of high schools. Along the way, we show that arbitrage can neutralize the policy at the college level and characterize inter-school flows, which display a cascade effect. Our model's predictions are supported by empirical evidence on the effects of the Texas Top Ten Percent Law, indicating that a policy intended to support diversity at the college level actually helped achieve it in the high schools. Thus, top-N percent and similar location-based policies have potential to be recast as novel instruments for the long-sought goal of achieving high school integration.