Economics research seminar: Onur Kesten, The University of Sydney

Presenter

Onur Kesten, The University of Sydney

Topic

Who gets the bonus? Affirmative Action Reforms in High School Admissions in China.  

abstract

We study the assignment of middle-school students to high schools in China. In an attempt to provide wider access to quality education for students from underperforming middle-schools, a series of affirmative action reforms have been implemented throughout China in the last decade. Under these reforms, each high school sets aside a specific privilege quota for certain middle schools. A student who receives this privilege obtains a lump-sum of extra points in the entrance exam. We show that the existing implementation of these reforms serves little toward the intended objectives. A major difficulty lies in determining which students should be granted the privilege. We propose a choice function that “endogenously” determines the recipients of the privilege. This is essentially the unique acceptant and fair choice function that efficiently allocates the privilege.  The cumulative offer mechanism associated with this choice function is stable and strategy-proof. Empirical analysis quantifies the gains from our proposal relative to the current mechanisms.