Shifting Pathways: Displacement, Substitution, and the Equilibrium Effects of Preferential College Admissions

Ursula Mello (), Ana Paula Melo and Alei Santos
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Ursula Mello: Insper, São Paulo
Ana Paula Melo: Howard University
Alei Santos: FGV EAESP

No 18880, IZA Discussion Papers from IZA Network @ LISER

Abstract: Admission policies can reshape educational pathways before college entry by changing opportunities and incentives to invest. We study these responses using Brazil’s 2012 Federal Quota Law, which expanded reserved seats for underrepresented students in elite public universities. Exploiting variation induced by pre-existing quota policies, we implement matched difference-in-differences and follow students through college completion. We find that targeted students increase high-school completion, exam participation, and college enrollment. In contrast, non-targeted students substitute toward private institutions rather than leave higher education and become more likely to complete college. Together, these responses reveal anticipatory adjustments and system-wide reallocation across higher education institutions.

Keywords: affirmative action; college admissions; human capital investment; educational attainment; displacement and reallocation (search for similar items in EconPapers)
JEL-codes: I23 I24 I28 J24 (search for similar items in EconPapers)
Date: 2026-08
New Economics Papers: this item is included in nep-edu and nep-lma
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