Effective affirmative action in school choice

TLDR

Affirmative action in school choice limits majority admissions to give minorities higher chances, but majority‑quota policies under deferred acceptance or top trading cycles can harm minorities. The study proposes minority‑reserve affirmative action and compares its welfare effects to majority‑quota policies. Under the minority‑reserve policy, schools give higher priority to minority students until the reserves are filled. Simulations show that minority‑reserve policies Pareto dominate majority‑quota policies, benefiting minorities on average while reducing adverse effects on majorities.

Abstract

The prevalent affirmative action policy in school choice limits the number of admitted majority students to give minority students higher chances to attend their desired schools. There have been numerous efforts to reconcile affirmative action policies with celebrated matching mechanisms such as the deferred acceptance and top trading cycles algorithms. Nevertheless, it is theoretically shown that under these algorithms, the policy based on majority quotas may be detrimental to minorities. Using simulations, we find that this is a more common phenomenon rather than a peculiarity. To circumvent the inefficiency caused by majority quotas, we offer a different interpretation of the affirmative action policies based on minority reserves. With minority reserves, schools give higher priority to minority students up to the point that the minorities fill the reserves. We compare the welfare effects of these policies. The deferred acceptance algorithm with minority reserves Pareto dominates the one with majority quotas. Our simulations, which allow for correlations between student preferences and school priorities, indicate that minorities are, on average, better off with minority reserves while adverse effects on majorities are mitigated.