Discovering Opportunities in New York City's Discovery Program: Disadvantaged Students in Highly Competitive Markets

Discovery program (DISC) is a policy used by the New York City Department of Education (NYC DOE) to increase the number of admissions of students from low socio-economic background to specialized high schools. This policy has been instrumental in increasing the number of disadvantaged students attending these schools, by reserving a percentage of seats to disadvantaged students that complete a three-week summer program (with a very high success rate [Hu, 2018]). However, assuming that students care more about the school they are assigned to rather than the type of seat they occupy (school-over-seat hypothesis), our empirical analysis using NYC DOE data from 12 recent academic years (2005--06 to 2016--17) shows that DISC creates about 950 in-group blocking pairs each year amongst disadvantaged students, impacting about 650 disadvantaged students every year. Moreover, we find that this program does not respect improvements as it benefits lower-performing disadvantaged students more than top-performing disadvantaged students by matching some of the former to more preferred schools, thus unintentionally creating an incentive to under-perform. These experimental results are confirmed by our theoretical analysis.