We study the efficiency of a centralized college admissions platform that operates jointly with a decentralized “off-platform” aftermarket. We exploit a policy change in 2012 in which a significant number of off-platform higher education options joined a centralized assignment system for higher-education programs in Chile. We show evidence that this policy change had impacts on real outcomes finding that the share of students declining their placed spot de-creased by 8% and dropout rates at the end of the first year of college dropped by 2 percentage points (a 16% drop) following this event. To quantify the welfare impacts of the aftermarket on the efficiency of the match, we develop and estimate an empirical model of college applications, aftermarket waitlists and matriculation choices, using individual-level administrative data from Chile on almost half a million applications, including test scores and enrollment decisions at all on- and off-platform higher education options. According to model estimates, welfare increases substantially, students begin their studies sooner, and fewer students drop out by the end of the first year of study when top off-platform programs join the platform. These benefits are greater for less advantaged students and for women. Counterfactual analysis suggests that more desirable options generate larger negative externalities when not on the platform. These externalities are mostly driven by students admitted on on-platform options that decline their spots to pursue off-platform programs; and are amplified by frictions in waitlists that yield socially inefficient allocations. Our results indicate that platform design can have real impact on outcomes of interest. Specifically, our findings suggest policymakers need to consider the implications of off platform options and their characteristics when designing regulation surrounding centralized assignment systems.
This paper studies screening and recruiting policies that use pre-college academic achievement to restrict or incentivize entry to teacher-colleges. Using historical records of college entrance exam scores since 1967 and linking them to administrative data on the population of teachers in Chile, the paper first documents a robust positive and concave relationship between pre-college academic achievement and several short and long run measures of teacher productivity. We then evaluate the effectiveness of two policies that used pre-college achievement to recruit or screen out students entering teacher-colleges. Using a regression discontinuity design based on the government’s recruitment efforts, we evaluate the effective-ness of targeted scholarships at shifting career choices of high achieving students at the individual level as well as the effect on the overall stock of teachers predicted effectiveness. We then evaluate the effects of a recent screening policy that forces teacher colleges to exclude below-average students. We quantify the policies effectiveness by retroactively simulating the policy rule and evaluate its success at screening out low performing teachers and mistakenly high performing teachers. We compare this benchmark policy rule to a series of potential data-driven policy rules and we find that even simple screening policies can identify a significant portion of ex-post low performing teachers. In both policies studied, screening low performing students is more effective than targeting recruitment efforts to only very high achieving students. Taken together, these findings suggest that the combination of better administrative data and flexible prediction methods can be used to implement practical screening and recruiting policies in some contexts and allow for better targeting of investments in future teachers.
While it is widely believed that family and social networks can inﬂuence important life decisions, identifying causal effects is notoriously difficult. This paper presents causal evidence from three countries that the educational trajectories of older siblings can signiﬁcantly inﬂuence the college and major choice of younger siblings. We exploit institutional features of centralized college assignment systems in Chile, Croatia, and Sweden to generate quasi-random variation in the educational paths taken by older siblings. Using a regression discontinuity design, we show that younger siblings in each country are signiﬁcantly more likely to apply and enroll in the same college and major that their older sibling was assigned to. These results persist for siblings far apart in age who are unlikely to attend higher education at the same time. We propose three broad classes of mechanisms that can explain why the trajectory of an older sibling can causally aﬀect the college and major choice of a younger sibling. We ﬁnd that spillovers are stronger when older siblings enroll and are successful in majors that, on average, have higher scoring peers, lower dropout rates and higher earnings from graduates. The evidence presented shows that the decisions, and even random luck, of your close family members and peer network, can have signiﬁcant effects on important life decisions such as the choice of specialization in higher education. The results also suggest that college access programs such as affirmative action, may have important spillover effects through family and social networks.
Family and social networks are widely believed to inﬂuence important life decisions but identifying their causal effects is notoriously difficult. Using admissions thresholds that directly affect older but not younger siblings’ college options, we present evidence from the United States, Chile, Sweden and Croatia that older siblings’ college and major choices can signiﬁcantly inﬂuence their younger siblings’ college and major choices. On the extensive margin, an older sibling’s enrollment in a better college increases a younger sibling’s probability of enrolling in college at all, especially for families with low predicted probabilities of enrollment. On the intensive margin, an older sibling’s choice of college or major increases the probability that a younger sibling applies to and enrolls in that same college or major. Spillovers in major choice are stronger when older siblings enroll and succeed in more selective and higher-earning majors. The observed spillovers are not well-explained by price, income, proximity or legacy effects, but are most consistent with older siblings transmitting otherwise unavailable information about the college experience and its potential returns. The importance of such personally salient information may partly explain persistent differences in college-going rates by geography, income, and other determinants of social networks.
The Paycheck Protection Program (PPP) extended over 650 billion dollars of forgivable loans in an unprecedented eﬀort to support small businesses aﬀected by the COVID-19 crisis. This paper provides evidence that information frictions and the “ﬁrst-come, ﬁrst-served” design of the PPP program skewed its resources towards larger ﬁrms and may have permanently reduced it’s eﬀectiveness. Using new daily survey data on small businesses in the U.S., we show that the smallest businesses were less aware of the PPP and less likely to apply. If they did apply, the smallest businesses applied later, faced longer processing times, and were less likely to have their application approved. These frictions likely mattered, as businesses that received aid re-port fewer layoﬀs, higher employment, and improved expectations about the future.