Betsey Stevenson and Justin Wolfers have an interesting column today in Bloomberg View:
The real crisis in American higher education is that our best colleges never see a large chunk of our smartest students. In an important recent study, the economists Caroline Hoxby and Christopher Avery found that very few high achievers from low-income families ever apply to top colleges, and that the missing applications from these kids largely explain why they’re underrepresented at our leading universities.
Sarena Goodman, a job market candidate from Columbia, provides additional evidence that many disadvantaged students who would earn sufficiently high scores to go to great schools aren’t taking the test and don’t end up in college.
ABSTRACT: In the last decade, five U.S. states have adopted mandates forcing high school juniors to take the ACT college entrance exam. Using microdata on ACT test-takers, I demonstrate that, in the two earliest-adopting states (Colorado and Illinois), between one-third and one-half of students were induced into testing by these policy changes, and that 40-45 percent of them, many from disadvantaged backgrounds, earned scores high enough to qualify for competitive-admission schools. Moreover, selective college enrollment rose by about 20 percent following implementation of the mandates in these states, with no effect on overall college enrollment. I argue that this combination of results is incompatible with unbiased decision-making about test participation and instead must reflect a large number of high-ability students who dramatically underestimate their candidacy for selective colleges. The results thus demonstrate that lack of information about one’s competitiveness is an important determinant of college outcomes, and that policies aimed at reducing this information shortage are likely to be effective at increasing human capital investment for a substantial number of students.