The Top-Ten Way to Integrate High Schools

We investigate "top-N percent" policies in college admission as possible instruments for increasing ethnic diversity in high schools. These policies produce incentives for students to relocate to schools with weaker academic competition. We provide theoretical conditions under which such arbitrage contributes to high-school desegregation. We show that arbitrage can neutralize the policy at the college level, and characterize inter-school ows, which display multiplying cascade effects. Our model's predictions are supported by empirical evidence on the effects of the Texas Top-Ten Percent Law, indicating that a policy intended to support diversity in universities actually helped achieve it in high schools.