The Early Decision Option in College Admission and its Impact on Student Diversity

Abstract:     
Many schools rely on early decision (ED) as an admission practice. Schools that adopt ED are able to generate additional resources by attracting wealthier students who, upon admission, make binding commitments to attend and to forego shopping for competing aid offers. An unanswered question is whether the resources generated from this price discrimination practice are used by schools during the regular admission process to attract more diverse students. We document the admission practices for private national universities and liberal arts colleges. We model the choice to adopt an ED program and its impact on student racial and geographic diversity. We find that schools that face more competition for students are more likely to adopt ED. While, in theory, it is possible for ED to enable greater diversity over some range of early enrollment percentages, we find that the overall heterogeneity of the students is lower for schools that adopt ED and that heterogeneity falls monotonically as the schools enroll larger percentages of their students through ED. Higher ED enrollment percentages appear to strongly and negatively affect Asian American and Hispanic students and positively affect white students

Number of Pages in PDF File: 40

Keywords: College admission, student diversity, early decision, antitrust

JEL Classification: I2, J7, L3

working papers series