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Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms

Author

Listed:
  • Adam Kapor
  • Mohit Karnani
  • Christopher Neilson

Abstract

We study the welfare and human-capital impacts of the configuration of on- and off-platform options in the context of Chile’s centralized higher education platform, leveraging administrative data and two policy changes: an expansion of the number of on-platform slots by approximately 40% and the introduction of a large scholarship program. We first show that more programs’ joining the platform led students to start college sooner and raised the share of students who graduated on time. We then develop a model of college applications, offers, waitlists, and matriculation choices, which we estimate using students’ ranked-ordered applications, on- and off-platform enrollment, and on-time graduation outcomes. When more programs join the platform, welfare increases, and the extent of aftermarket frictions matters less for welfare, enrollment, and graduation rates. High-SES students have greater access to off-platform options, and gains from platform expansion are larger for students from lower-SES backgrounds. Our results indicate that expanding the scope of a higher education platform can have real impacts on welfare and human capital.

Suggested Citation

  • Adam Kapor & Mohit Karnani & Christopher Neilson, 2022. "Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms," NBER Working Papers 30257, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30257
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    Cited by:

    1. Michela Tincani & Fabian Kosse & Enrico Miglino, 2022. "The Effect of Preferential Admissions on the College Participation of Disadvantaged Students: The Role of Pre-College Choices," Working Papers 2022-034, Human Capital and Economic Opportunity Working Group.
    2. Akbarpour, Mohammad & Kapor, Adam & Neilson, Christopher & van Dijk, Winnie & Zimmerman, Seth, 2022. "Centralized School choice with unequal outside options," Journal of Public Economics, Elsevier, vol. 210(C).
    3. Machado, Cecilia & Szerman, Christiane, 2021. "Centralized college admissions and student composition," Economics of Education Review, Elsevier, vol. 85(C).
    4. Olivier de Groote & Anaïs Fabre & Margaux Luflade & Arnaud Maurel, 2025. "Sequential College Admission Mechanisms and Off-Platform Options," Working Papers hal-05212878, HAL.
    5. Nikhil Agarwal & Eric Budish, 2021. "Market Design," NBER Working Papers 29367, National Bureau of Economic Research, Inc.
    6. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2023. "Gains from Reassignment: Evidence from A Two-Sided Teacher Market," Upjohn Working Papers 23-392, W.E. Upjohn Institute for Employment Research.
    7. Tom‡s Larroucau & Ignacio A. Rios & Ana•s Fabre & Christopher Neilson, 2025. "College Application Mistakes and the Design of Information Policies at Scale," Cowles Foundation Discussion Papers 2461, Cowles Foundation for Research in Economics, Yale University.

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • L0 - Industrial Organization - - General

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