Affirmative Action Bans and the "Chilling Effect"

This paper examines whether California's Proposition 209, which led to the 1998 ban on the use of racial preferences in admissions at the University of California (UC) system, lowered the value that underrepresented minorities placed on attending UC schools. In particular, we look for evidence of a chilling effect in minority yield rates (the probability of enrolling in a UC school conditional on being accepted) after Proposition 209. Using individual-level data on every freshman applicant to the UC system from 1995 to 2000, we find no evidence that yield rates fell for minorities relative to other students after Proposition 209, even after controlling for changes in student characteristics and changes in the set of UC schools to which students were admitted. In fact, our analysis suggests Proposition 209 had a modest "warming effect". We investigate and rule out the possibility that this warming effect was driven by changes in the selection of students who applied to the UC, changes in financial aid or changes in minorities' college opportunities outside the UC system. Instead, we present evidence consistent with the idea that Proposition 209 increased the signaling value of attending UC schools for minorities. (JEL: I21, J15, J24, J78, K31)