On the Spatial Allocation of College Seats: Human Capital Production and the Distribution of Skilled Labor

Abstract

How to allocate college seats spatially is an important yet largely neglected issue. It entails a policy tradeoff between efficiency in aggregate human capital production and equality of college opportunities across regions. Furthermore, because the spatial allocation of college seats assigns students to a college location, the resulting flow of attendance also influences the spatial distribution of skilled workers through post-college migration. This paper quantifies the trade-off between efficiency and multidimensional inequality by analyzing province-based college admission quotas in China. Combining national administrative data and surveys, I estimate a dynamic model of college and migration choice under spatial quota constraints. I find substantial gaps in pre-college human capital among college applicants across provinces, while this disparity is not well reflected in the allocated admission quotas. A purely merit-based nationwide admission increases aggregate human capital at the cost of worse opportunities and substantially more severe brain drain in less developed regions. Comparing the current spatial quotas in China against the efficiency-equality frontier implies a large policy weight toward a more equalized spatial supply of skilled labor.

Keywords: Regional inequality, spatial sorting, human capital

JEL Classification: R12, R23, J24, I24, O15