Substitution effects in college admissions

Arbeitspapier

I show how local supply changes create ripple effects in a national educational market. Admitting an applicant to a program will free up a slot to be filled at her next-best alternative. To investigate such substitution effects I re-engineer the centralized admission system of the Danish tertiary education sector and simulate equilibria under counterfactual supply. I estimate potential earnings with a regression discontinuity design and quantify market clearings in terms of earnings. On average, a change of 10 slots leads to 15 applicants moving and substitution effects explain 40 percent of the variation in earnings. Substitution externalities are generally positive but vary in sign and magnitude. I document a trade-off between earnings and inequality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Memorandum ; No. 03/2021

Classification and Topics

• Classification: Wirtschaft ; Computational Techniques; Simulation Modeling ; Analysis of Education ; Educational Finance; Financial Aid ; Education and Inequality ; Returns to Education ; Human Capital; Skills; Occupational Choice; Labor Productivity ; National Government Expenditures and Education
• Subject: Field of study ; College admission ; Program evaluation ; RDD

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gandil, Mikkel Høst
• Event: Veröffentlichung
• (who): University of Oslo, Department of Economics
• (where): Oslo
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/250305
• Last update: 10.03.2025, 11:41 AM CET