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Shifting Pathways: Displacement, Substitution, and the Equilibrium Effects of Preferential College Admissions

Author

Listed:
  • Mello, Ursula

    (Insper, São Paulo)

  • Melo, Ana Paula

    (Howard University)

  • Santos, Alei

    (FGV EAESP)

Abstract

Admission policies can reshape educational pathways before college entry by changing opportunities and incentives to invest. We study these responses using Brazil’s 2012 Federal Quota Law, which expanded reserved seats for underrepresented students in elite public universities. Exploiting variation induced by pre-existing quota policies, we implement matched difference-in-differences and follow students through college completion. We find that targeted students increase high-school completion, exam participation, and college enrollment. In contrast, non-targeted students substitute toward private institutions rather than leave higher education and become more likely to complete college. Together, these responses reveal anticipatory adjustments and system-wide reallocation across higher education institutions.

Suggested Citation

  • Mello, Ursula & Melo, Ana Paula & Santos, Alei, 2026. "Shifting Pathways: Displacement, Substitution, and the Equilibrium Effects of Preferential College Admissions," IZA Discussion Papers 18880, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18880
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    Keywords

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    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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