Income-Based Affirmative Action in College Admissions

58 Pages Posted: 14 Jul 2015 Last revised: 11 May 2022

See all articles by Luiz Brotherhood

Luiz Brotherhood

University of Barcelona; University of Barcelona - Barcelona Economic Analysis Team (BEAT)

Bernard Herskovic

University of California, Los Angeles (UCLA) - Anderson School of Management; National Bureau of Economic Research (NBER)

Joao Ramos

Marshall School of Business - University of Southern California

Date Written: March 18, 2019

Abstract

We study whether college admissions should implement quotas for lower-income applicants. We develop an overlapping-generations model and calibrate it to data from Brazil, where such a policy is widely implemented. In our model, parents choose how much to invest in their child’s education, thereby increasing both human capital and likelihood of college admission. We find that, in the long run, the optimal income-based affirmative action increases welfare and aggregate output. It improves the pool of admitted students but distorts pre-college educational investments. The welfare-maximizing policy benefits lower- to middle-income applicants with income-based quo-tas, while higher-income applicants face fiercer competition in college admissions. The optimal policy reduces intergenerational persistence of earnings by 5.7% and makes nearly 80% of households better off.

Keywords: Affirmative Action, Intergenerational Mobility, Educational Investment

JEL Classification: I2, E24, J62

Suggested Citation

Brotherhood, Luiz and Herskovic, Bernard and Ramos, Joao, Income-Based Affirmative Action in College Admissions (March 18, 2019). Available at SSRN: https://ssrn.com/abstract=2628303 or http://dx.doi.org/10.2139/ssrn.2628303

Luiz Brotherhood

University of Barcelona

University of Barcelona - Barcelona Economic Analysis Team (BEAT) ( email )

Gran Via de les Corts Catalanes
Barcelona, 08007
Spain

Bernard Herskovic (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

Los Angeles, CA 90095-1481
United States

HOME PAGE: http://bernardherskovic.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Joao Ramos

Marshall School of Business - University of Southern California ( email )

701 Exposition Boulevard, STE 205
Los Angeles, CA 90089-1422
United States

HOME PAGE: http://www.joaoaramos.com/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
623
Abstract Views
3,484
rank
61,819
PlumX Metrics