Preferential Admission and MBA Outcomes: Mismatch Effects by Race and Gender

Abstract

We consider the “mismatch” hypothesis in the context of graduate management education. Both blacks and Hispanics, conditional on a rich set of human capital variables, prior earnings and work experience, and noncognitive attributes, are favored in admission to top 50 MBA programs. To test for mismatch effects, we provide two comparisons: (1) of comparable individuals (in terms of race, gender and credentials) at different quality MBA programs, and (2) of individuals of differing race or gender (but with similar credentials) at comparable MBA programs. Despite admission preferences, blacks and Hispanics enjoy similar or even higher returns to selectivity than whites.

Keywords: mismatch, private information, affirmative action, MBA programs

JEL Classification: D8, I28, J15