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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, 2016. "The Effect of the Increasing Demand for Elite Schools on Stratification," Economics Working Papers MWP2016/02, European University Institute.
  • Handle: RePEc:eui:euiwps:mwp2016/02
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    References listed on IDEAS

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    1. Parag A. Pathak, 2011. "The Mechanism Design Approach to Student Assignment," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 513-536, September.
    2. 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.
    3. Christopher Avery & Parag A. Pathak, 2015. "The Distributional Consequences of Public School Choice," NBER Working Papers 21525, National Bureau of Economic Research, Inc.
    4. Justine S. Hastings & Jeffrey M. Weinstein, 2008. "Information, School Choice, and Academic Achievement: Evidence from Two Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 123(4), pages 1373-1414.
    5. 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.
    6. Caroline M. Hoxby, 2009. "The Changing Selectivity of American Colleges," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 95-118, Fall.
    7. Caterina Calsamiglia & Francisco Martínez-Mora & Antonio Miralles, 2015. "School Choice Mechanisms, Peer Effects and Sorting," Discussion Papers in Economics 15/01, Division of Economics, School of Business, University of Leicester.
    8. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
    9. 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.
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    1. repec:eee:gamebe:v:117:y:2019:i:c:p:59-81 is not listed on IDEAS

    More about this item

    Keywords

    School Choice; Stratification; Elite Schools; Aspirations Gap;

    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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