Do contextual admissions hold back productivity?

By Gill Wyness, Lindsey Macmillan, Claire Crawford and Richard Murphy.

There are substantial financial gains to attending university, and gains are especially high for the most selective institutions, from which many of the highest paying professions recruit. Recognising this, many parents send their children to independent schools, believing that this will dramatically increase their chances of gaining a place at a highly competitive institution. But a recent investigation by The Telegraph suggests the independent school stranglehold on Oxbridge is under threat, with the likelihood of their pupils receiving an offer dropping dramatically over the last five years. Commentators have blamed the practise of contextual admissions, which give pupils from state schools preferential entry – in some cases even when they have lower entry grades than those from private schools. Those against the practise argue it amounts to “class discrimination” and “social engineering”.

But the reality is that there is a clear economic rationale for contextual admissions. Students from disadvantaged backgrounds have typically received far less investment in their education than their more advantaged peers – including, but not limited to, the fact that they tend to attend lower quality schools. We would expect these disadvantages to translate into lower grades for a given level of underlying ‘ability’, reducing promising but disadvantaged students’ chances of gaining a place at a selective university. Grades are therefore contextualised for equity reasons, to “level the playing field” at this crucial life stage.

While there can be little doubt that contextual admissions improve equity, good economic policies should also be efficient. But many are concerned that contextual admissions may be inefficient. This would be the case if the lower attaining state school students who were given preferential entry to Oxbridge found themselves struggling academically, did poorly in their degrees and were less productive in the labour market. If their net gain from Oxbridge (versus how well they would have done at a lower quality institution) is lower than that which would have been experienced by the independent school students they displaced (taking account of how well the displaced student would have done at Oxbridge versus where they eventually ended up), this would constitute an efficiency loss. We should consider this equity-efficiency trade-off when we think about contextual admissions.

So, does it matter which students go to which universities? Are there higher returns for higher achieving students attending highly selective courses? Could the practice of contextual admissions be said to be damaging productivity or hampering economic growth?

One area of research we can look to, to inform this debate, is the area of student to university match. Research in this area considers the types of courses that students of different achievement levels attend, asking which is the most important for earnings: student achievement, course quality, or the interaction – or match – between the two. This helps address the question of whether students have better outcomes at universities to which they are better ‘matched’.

The evidence from this relatively small area of literature is mixed, however, with much of the evidence based on the effects of affirmative action bans in the United States. This has strong parallels with the use of contextualised admissions, in that it concerns the use of race (and other factors) to judge university applicants in order to improve the diversity of student populations, and is just as controversial in the US as it is here, with ongoing legal action currently being brought against two top universities – Harvard and University of North Carolina – which has now made its way to the Supreme Court.

One paper (Arcidiacono et al, 2016) examines the impact of the ban on affirmative action in California in 1998. After the ban, minority students no longer received preferential admissions to highly selective universities like Berkeley. This study argues that lower achieving minority students at top-ranked campuses would have higher science graduation rates had they attended lower-ranked campuses – in other words it was economically inefficient to send them to these universities.

However, a more recent paper studying the same affirmative action ban (Bleemer, 2022) found that it harmed underrepresented minority students by lowering their degree attainment and wages, as after the ban they were cascaded into lower quality universities. Indeed, the study suggested that that affirmative action’s net benefits for underrepresented minority applicants exceed its net costs for the white and Asian applicants at most risk of being displaced. The two papers use quite different approaches to study the question which may provide some explanation of why they find opposing results (with the former paper using a structural model, and the latter using nonexperimental methods). Other papers (Dillon and Smith, 2020; Light and Strayer, 2000) have found some evidence of student-university match effects, but have also found that these are far outweighed by course quality effects, suggesting students of all ability levels should try to get onto the best quality course they can to maximise their earnings. In other words, disadvantaged students are just as likely to benefit from going to a high quality course as those with higher attainment on entry, meaning contextual admissions are unlikely to harm them individually – while any efficiency losses are likely to be small.

A related strand of literature from the UK compares degree outcomes for students from different backgrounds or different schools with the same achievement on entry. These studies (e.g. Crawford, 2014a,b) find that students from private schools are, on average, more likely to drop-out, less likely to complete their degree and less likely to graduate with a 1^st or 2:1 than state school students entering the same course with the same grades. This hints at the fact that achievement in school does not capture ‘ability’ or ‘potential to succeed’ in the same way for those from different school types, providing support for the rationale underlying contextual admissions.

Given the scarcity of evidence, and its mixed results, it is hard to argue that there are likely to be substantial efficiency losses to society from contextual admissions – while there are undoubtedly equity gains. There are still vast socio-economic disparities in entry rates to highly selective institutions in the UK. These disparities occur because those from lower socio-economic backgrounds typically achieve lower grades than those from richer backgrounds, who have had the benefit of a lifetime of high-quality education and parental input.

Contextualising admissions is one of the few tools we have at our disposal to help students with great potential to gain a place at a selective institution. We should not outlaw this practice without good evidence that it significantly harms productivity.