Improving efficiency and equality in school choice

Josue Ortega and Thilo Klein

No 22-046, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: How should students be assigned to schools? Two mechanisms have been suggested and implemented around the world: deferred acceptance (DA) and top trading cycles (TTC). These two mechanisms are widely considered excellent choices because they are strategy-proof, in addition to DA's no justified envy and TTC's Pareto optimality. We show theoretically and empirically that both mechanisms perform poorly with regard to two key desiderata such as efficiency and equality, even in large markets. In contrast, the rank-minimizing mechanism (RM) is significantly more efficient and egalitarian. It is also Pareto optimal for the students, unlike DA, and generates less justified envy than TTC.

Keywords: school choice; inequality; efficiency; justified envy (search for similar items in EconPapers)
JEL-codes: C78 D73 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Improving Efficiency and Equality in School Choice (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:22046

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