School choice to social welfare

The problem

Students rely heavily on rankings – known in Australia as league tables – for school and college choice, which leads to overcrowding, particularly for highly ranked schools. Broader search – looking beyond rankings to individual needs and goals – alleviates this; students can end up discovering lower-ranked yet better-fitting options, or choose top-ranked schools because it’s a good fit, not because it is popular. As demand spreads across schools, social welfare improves, since better-suited schools result in better educational outcomes. For example, if some students find a better fit in a lower-ranked school, more seats are available at higher-ranked ones which are taken by those who value them most. With more students in schools that suit them, achievement, engagement and workforce preparedness increases. But students don’t necessarily know their best-fitting schools, and search takes effort. To effectively encourage search, we need a better understanding of how students engage in it.

The research

Focusing on students’ knowledge of their admission chances and priority, since this is crucial in deciding whether to spend time learning what they prefer and which school to pick when they have (or don’t have) that information, researchers are comparing admission systems. They use theory and lab experiments, and look at systems which give students full, partial, or no knowledge of their likelihood for admission. While theory suggests more information doesn’t always improve outcomes (for students and the system overall), experiments show students do best when they have full information; they understand how the system works, when it is worth searching, and what might help them find the best fit.

The impact

The insights have practical policy relevance, as education systems can use the knowledge that sharing information upfront about admission chances can improve student choices and reduce congestion. Students benefit from a more efficient system, and from knowing when and where to put their effort into search and, ultimately, ending up at a school that suits them.

Department: Economics 
Area: School choice