Does affirmative action lead to mismatch? : a new test and evidence

We argue that once we take into account the students’ rational enrollment decisions, mismatch in the sense that the intended beneficiaries of affirmative action admission policies are made worse off ex ante can only occur if selective universities possess private information. Ex ante mismatch occurs when revelation of this information would have changed the student’s choice of school. This necessary condition for mismatch provides the basis for a new test. The test is implemented using data from the Campus Life and Learning Project at Duke University. Evidence shows that Duke does possess private information that is a statistically significant predictor of students’ post-enrollment academic performance. Further, this private information is shown to affect the subjective measures of students’ satisfaction as well as their persistence in more difficult majors. We also propose strategies to evaluate more conclusively whether the presence of Duke private information has generated mismatch.