Michela Carlana, Harvard Kennedy School

Paper: How Far Can Inclusion Go? The Long-term Impacts of Preferential College Admissions

Abstract: Affirmative action and preferential admission policies play a crucial role in fostering diversity by bolstering the prospects of historically disadvantaged groups. In this paper, we analyze the long-term effects of a Chilean policy called PACE (Programa de Acompanamiento y Acceso Efectivo a la Educacion Superior), which targets students from underprivileged schools, ensuring that those graduating in the top 15 percent of their high school class receive guaranteed admission to selective colleges. Leveraging the randomized implementation of the PACE initiative and employing a regression discontinuity design, our analysis reveals that PACE yields positive labor market effects for the average targeted student, driven by the selectivity of the attended universities. However, for marginally eligible students, negative labor market outcomes emerge, potentially attributable to mismatches between their skills and the academic rigor of selective colleges. Finally, our study uncovers that students in the bottom 85 percent of treated schools experience positive labor market outcomes, with a notable 10\% increase in cumulative earnings by the fifth year after high school. Through an exploration of underlying mechanisms, we identify equilibrium effects of preferential admissions on local labor markets.