Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms

Research output: Contribution to journalArticlepeer-review

Abstract

We study the welfare and human capital impacts of colleges’ (non)par-ticipation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, of-fers, wait lists, matriculation, and graduation. When the platform ex-pands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds.

Original languageEnglish (US)
Pages (from-to)2346-2395
Number of pages50
JournalJournal of Political Economy
Volume132
Issue number7
DOIs
StatePublished - Jul 2024
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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