The Efficiency of Race-Neutral Alternatives to Race-Based Affirmative Action: Evidence from Chicago’s Exam Schools

Several K-12 and university systems have adopted race-neutral affirmative action in place of race-based alternatives. This paper explores whether these plans are effective substitutes for racial quotas Chicago Public Schools (CPS), which now employs a race-neutral, place-based system at its selective exam high schools. The CPS plan is ineffective compared to that explicitly consider race: about three-quarters the reduction average entrance scores top schools could been avoided with same level diversity. Moreover, less adding low-income students than was previous quotas. We develop theoretical framework motivates quantifying inefficiency policies based on distortion student preparedness they create given diversity use it evaluate several can be improved ways, but no policy restores minority representation prior levels without substantially greater distortions, implying significant efficiency costs from prohibitions explicit race. (JEL H75, I21, I28, J15)