A Welfare Comparison of School Choice Mechanisms

In recent years, China has experienced a trend of changing from the Boston mechanism (BM) to the Chinese parallel mechanism for high school and college admissions. Using a unique data set from the high-school-assignment system in China that combines survey data eliciting students' school preferences with administrative data that cover students' school choices and assignment results under both mechanisms, this paper compares the welfare performance of BM, the Chinese parallel mechanism, and the Deferred Acceptance (DA) mechanism. We find DA yields higher average welfare than the Chinese parallel mechanism, which is higher than the average utility under BM. We also find a more manipulable mechanism hurts students from low socioeconomic districts. Less manipulable mechanisms are more likely to assign students with higher score percentiles to schools with higher education quality, especially for students from higher socioeconomic districts. However, lower-scored students from higher socioeconomic districts decreased their human capital production after the mechanism was changed to the Chinese parallel mechanism.