Overcoming Racial Gaps in School Preferences: The Effect of Peer Diversity on School Choice

Differences in school choice by race contribute to school segregation and unequal access to effective schools. Conditional on test score and district of residence, Black and Hispanic families consistently choose schools with fewer white and Asian students, lower average achievement, and lower value-added. This paper combines unique survey data and administrative data from New York City to identify the determinants of racial disparities in school choice and shows that attending a more diverse middle school can mitigate racial choice gaps. Instrumental variable estimates show that middle school students exposed to more diverse peers apply to and enroll in high schools that are also more diverse. These effects particularly benefit Black and Hispanic students who, as a result, enroll in higher value-added high schools. A post-application survey of guardians of high school applicants suggests that most cross-race differences in choice stem from information gaps and homophily in preferences for school demographics. The survey results also reveal that exposure to diverse middle school peers reduces racial differences in choices by addressing these underlying determinants: it increases preferences for peer diversity and broadens the range of known school options.