Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250305 
Year of Publication: 
2021
Series/Report no.: 
Memorandum No. 03/2021
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
I show how local supply changes create ripple effects in a national educational market. Admitting an applicant to a program will free up a slot to be filled at her next-best alternative. To investigate such substitution effects I re-engineer the centralized admission system of the Danish tertiary education sector and simulate equilibria under counterfactual supply. I estimate potential earnings with a regression discontinuity design and quantify market clearings in terms of earnings. On average, a change of 10 slots leads to 15 applicants moving and substitution effects explain 40 percent of the variation in earnings. Substitution externalities are generally positive but vary in sign and magnitude. I document a trade-off between earnings and inequality.
Subjects: 
Field of study
College admission
Program evaluation
RDD
JEL: 
C63
I21
I22
I24
I26
J24
H52
Document Type: 
Working Paper

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