Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150194
Authors: 
Yenmez, M. Bumin
Yildirim, Muhammed Ali
Hafalir, Isa Emin
Year of Publication: 
2013
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 8 [Year:] 2013 [Issue:] 2 [Pages:] 325-363
Abstract: 
The prevalent affirmative action policy in school choice limits the number of admitted majority students to give minority students higher chances to attend their desired schools. There have been numerous efforts to reconcile affirmative action policies with celebrated matching mechanisms such as the deferred acceptance and top trading cycles algorithms. Nevertheless, it is theoretically shown that under these algorithms, the policy based on majority quotas may be detrimental to minorities. Using simulations we find that this is a more common phenomenon rather than a peculiarity-up to 25% of minorities and 55% of majorities can be worse off. To circumvent the inefficiency caused by majority quotas, we offer a different interpretation of the affirmative action policies based on minority reserves. With minority reserves, schools give higher priority to minority students up to the point that the minorities fill the reserves. We compare the welfare effects of these policies. The deferred acceptance algorithm with minority reserves Pareto dominates the one with majority quotas. Our simulations, which allows for correlations between student preferences and school priorities, indicate that minorities are on average better off with minority reserves while adverse effects on majorities are mitigated.
Subjects: 
School choice
affirmative action
deferred acceptance algorithm
top trading cycles algorithm
JEL: 
C78
D61
D78
I20
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article

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