The Impacts of Removing College Entrance Exams: Evidence From the Test‐Optional Movement

ABSTRACT Before 2020, around 250 four‐year colleges and universities adopted a test‐optional application procedure that allowed students to apply for admission without submitting college entrance exam score. Many schools adopted this procedure to encourage greater racial and socioeconomic diversity. Unfortunately, we know little about the impact of these policies. In this paper, I use a difference‐in‐differences design to examine the impact of this reform on schools that adopted the policy between 2006 and 2014. Compared to schools that did not switch, test‐optional schools witnessed around a 15% increase in the enrollment of Black, Native American/Alaskan Native, and Hispanic students and around a 7% increase in the number of Pell Grant students. I also show that after switching, schools experienced an increase in the number of students receiving institutional grant aid, but decreases in the average aid granted. Institutions interested in adopting these policies should consider these possible unintended consequences.