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Colleges and universities that adopt early decision (ED) as an admission practice can generate additional resources by attracting wealthier students who make binding commitments to attend and forgo shopping for competing aid offers. An unanswered question is whether the resources generated from price discrimination are used by schools during the regular admission process to attract more diverse students. Using a sample of private national universities and liberal arts colleges, we model the choice to adopt an ED program and its impact on students’ racial and geographic diversity. We find that schools facing more competition for students are more likely to adopt an ED program. The overall heterogeneity of students is lower for schools that adopt ED, and heterogeneity decreases as schools enroll larger percentages of students through ED. Higher ED enrollment percentages appear to strongly and negatively affect Asian American and Hispanic students and positively affect white students.

The Early Decision Option in College Admission and its Impact on Student Diversity