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

Cecilia Machado, Germ\'an Reyes and Evan Riehl

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Abstract: We examine the effects of an affirmative action policy at an elite Brazilian university that reserved 45 percent 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 percent 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: 2023-05, Revised 2023-06
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