Our next Yinghua He Empirical Micro Workshop will be held on Monday, 9th December, from 12:30 to 13:30 in Auditorium 4.
Olivier De Groote will present: “College Admission Mechanisms and the Opportunity Cost of Time”, co-authored with Anaïs Fabre, Margaux Luflade, and Arnaud Maurel.
Abstract:
College admission platforms aim at achieving a balance between avoiding congestion and allowing for ex-post flexibility in students’ matches. The latter is crucial as the existence of off-platform options implies that some students will drop out of the platform in favor of their outside option, freeing up seats in on- platform programs. Sequential assignment procedures introduce such flexibility, by creating a dynamic trade-off for students: they can choose to delay their enrollment decision to receive a better offer later, at the cost of waiting before knowing their final admission outcome. We quantify this trade-off in a setting in which waiting costs can be heterogeneous across socio-economic groups. We use administrative data on rank-ordered lists and waiting decisions from the French college admission system to estimate a dynamic model of application and acceptance decisions. We find that waiting costs are large, especially for students of low socio-economic status. Nevertheless, we find substantial welfare gains for all groups from using a multi-round system, as it increases the number of matches and enables students to enroll in more specialized programs.