Marginal Admission to Elite High Schools: Long-run Effects on Labor Market Outcomes

We estimate the long-run effects of marginal admission to elite public high schools on students' labor supply in the context of Mexico City's centralized high school admission system. Using a regression discontinuity approach, we compare students whose placement exam scores are just above and just below the elite admission threshold. We find that five and ten years after the admission exam, marginally admitted students are less likely to be employed in the formal private sector, and, if employed, they earn lower wages. However, these employment and wage gaps close after 15 years. Moreover, we find that marginal admission to elite high schools leads to delayed entry into the formal labor market, and, at least in the short run, students in elite high schools seem to sort into lower-productivity firms and industries. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.