Document Type

Working Paper

Publication Date

12-2020

JEL Codes

C78, D82, I23, I28

Working Paper Number

2020-05

Abstract

Matching mechanisms are crucial in centralized college admissions. In China, provinces centrally assign millions of students to universities every year. In the past two decades, many provinces changed from the Immediate Acceptance (IA) mechanism to the parallel mechanism, a hybrid of IA and the Deferred Acceptance mechanism. Using administrative data on millions of students, we find that changing to parallel mechanism reduced undesirable matching outcomes, including justified envy measures, null admission, and retaking. We also find a nonlinear and surprisingly nonmonotonic relationship between the improvement in justified envy measures and parallel choice bandwidth. Finally, congestion in mid-ranked universities could explain the higher levels of justified envy and larger improvements from mechanism change for students ranked in the middle.

Acknowledgements

We would like to thank Yan Chen, Jie Zheng, and seminar participants at Colgate University, Jinan University, and SUNY Buffalo for helpful comments. We thank Shuai Zhao and Chenggang Hu for their research assistance.

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