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The Direct and Spillover Effects of Large-Scale Affirmative Action at an Elite Brazilian University

Cecilia Machado, Germán Reyes and Evan Riehl

Journal of Labor Economics, 2025, vol. 43, issue 2, 391 - 431

Abstract: We examine the effects of an affirmative action policy at an elite Brazilian university that reserved 45% of admission slots for Black and low-income students. We find that marginally admitted students who enrolled through the affirmative action tracks experienced a 14% increase in early-career earnings. But the adoption of affirmative action also caused a large decrease in earnings for the university’s most highly ranked students. We present evidence that the negative spillover effects on highly ranked students’ earnings were driven by both a reduction in human capital accumulation and a decline in the value of networking.

Date: 2025
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