School Admissions, Mismatch and Graduation

This paper studies the effects of changing the priority ordering for admission to high school in the centralized education system in Mexico City. Elite schools are oversubscribed and seat rationing follows a priority ordering that relies solely on an admission exam score. The admission process ignores other available skill measures, such as middle school grade point average (GPA), which may better capture skills important for later education and life-cycle outcomes. We first show that marginal admission to an elite high school decreases on-time graduation for students with low middle school GPAs and does not affect it for students with high middle school GPAs. We then study the effects of counterfactual admission policies wherein the priority ordering increasingly weighs middle school GPA. The larger the weight on GPA, the larger the share of females and low-income students admitted to elite schools. However, the elite school on-time graduation is concave with respect to the weight on GPA. The optimal admission policy would put a weight of 60% on GPA and a 40% weight on the admission exam score.