Affirmative Action and University Fit: Evidence from Proposition 209

Abstract

Proposition 209 banned the use of racial preferences in admissions at public colleges in California. We analyze unique data for all applicants and enrollees within the University of California (UC) system before and after Prop 209. After Prop 209, graduation rates increased by 4.4%. We present evidence that certain institutions are better at graduating more-prepared students while other institutions are better at graduating less-prepared students and that these matching effects are particularly important for the bottom tail of the qualification distribution. We find that Prop 209 led to a more efficient sorting of minority students, explaining 18% of the graduation rate increase in our preferred specification. Further, universities appear to have responded to Prop 209 by investing more in their students, explaining between 23-64% of the graduation rate increase.