Bray Theory Workshop

The prevalent affirmative action policy in school choice limits the number of majority students to increase minority representation. Nevertheless, this policy may be detrimental to minority students. Instead, we introduce an alternative policy that gives preferential treatment to minorities. We compare the welfare effects of these policies under the deferred acceptance and the top trading cycles algorithms. The deferred acceptance algorithm with preferential treatment Pareto dominates the one with majority quotas. Under simulations, minorities are on average better off with the preferential treatment while adverse effects on majorities are mitigated. Our main results carry over to multiple student types.