The Law of Unintended Consequences Strikes Again | The Grumpy Economist

You ignore the Law of Unintended Consequences at your own peril....as so many politicians do. 

from John Cochrane's Blog:

https://johnhcochrane.blogspot.com/2018/03/unintended-consequences.html

Unintended consequences of well-intentioned policies, unexpected behavioral changes in response to ignored incentives, unusual supply (or demand) responses to demand (or supply) interventions, and clever new pathways for changes to happen are the sorts of mechanisms that make economics fun, and I hope useful to cause-and-effect understanding of human affairs.

A case in point is an Atlantic article from 2012 that a friend pointed me to last week, by Richard Sander and Stuart Taylor Jr.
...

UCLA, an elite school that used large racial preferences until the Proposition 209 ban [on overt racial preferences] took effect in 1998... Many predicted that over time blacks and Hispanics would virtually disappear from the UCLA campus.
And there was indeed a post-209 drop in minority enrollment as preferences were phased out. Although it was smaller and more short-lived than anticipated, it was still quite substantial: a 50 percent drop in black freshman enrollment and a 25 percent drop for Hispanics...

[However,]
...

 The total number of black and Hispanic students receiving bachelor's degrees were the same for the five classes after Prop 209 as for the five classes before.
How was this possible? 

Indeed, I too would have guessed, if I didn't think hard about it, that eliminating racial preferences would have to have reduced the number of minorities who graduated, and that the affirmative action argument would have gone on to other pros and cons.

But that's wrong.

 First, the ban on preferences produced better-matched students at UCLA, students who were more likely to graduate. The black four-year graduation rate at UCLA doubled from the early 1990s to the years after Prop 209.

Yes. Half the admits but double the graduation rate leaves constant the number of graduates.

Second, strong black and Hispanic students accepted UCLA offers of admission at much higher rates after the preferences ban went into effect; their choices seem to suggest that they were eager to attend a school where the stigma of a preference could not be attached to them. This mitigated the drop in enrollment.

Third, many minority students who would have been admitted to UCLA with weak qualifications before Prop 209 were admitted to less elite schools instead; those who proved their academic mettle were able to transfer up to UCLA and graduate there.

Thus, Prop 209 changed the minority experience at UCLA from one of frequent failure to much more consistent success. The school granted as many bachelor degrees to minority students as it did before Prop 209 while admitting many fewer and thus dramatically reducing failure and drop-out rates. 

 To be absolutely clear, this post is about pathways. I do not wish to wade into a perilous pro or anti affirmative action debate, a basically radioactive topic for white male economists. (Though I am pleased to report a quick Google search that suggests both Sanders and Taylor still employed, something that might not happen if their book were published today.)

And a proponent of affirmative action could nonetheless make many arguments consistent with this work.  Perhaps dropping out of UCLA is good for people. Perhaps more minorities on campus is useful for white students' social perceptions, even if it harms its intended beneficiaries. Perhaps things were going on at other universities that drove minority upper class people UCLA's way. UCLA is part of the California state system, which encourages transfers at year two, which is not the case everywhere. I also don't know how the numbers are holding up post 2012.

Today's post is not about this larger argument.

 I'm willing to bet Brad DeLong still blogs I'm racist for even mentioning the topic, but that will be an interesting test of today's political climate.

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