The effects of attending a diverse college

The question of whether there are benefits to be obtained from having a diverse student body is a key issue in the debate over affirmative action. This paper estimates the effects of college racial diversity on post-college earnings, civic behavior, and satisfaction with the college attended. I use the Beginning Postsecondary Students survey, which allows me to control for exposure to racial diversity prior to college. Moreover, I use two techniques from Altonji, Elder, and Taber (2005) to address the issue of selection on unobservables. The first is a sensitivity analysis showing how the coefficient on diversity changes when different values of the correlation are imposed in a system of equations that consists of a selection equation and an outcome equation. The second is estimation based upon an assumption that selection on unobservables equals selection on observables, which, along with the OLS results, gives estimates of bounds on the effect. Single-equation estimates suggest a possible positive effect of diversity on satisfaction with the racial climate at the college attended and a negative effect on community service, but I do not find an effect on other outcomes. Moreover, the estimates are very sensitive to the assumptions made about selection on unobservables.