This paper provides a unique illustration of the benefits of affirmative action in higher educaiton. It focuses on China in the early 21st Century to gauge the impacts of advantges afforded to ethnic minority group members in admissions to colleges and univerities. It specifically addresses a variant of the mismatch hypothesis that alleges that minority students sorted into higher ranked universities are worse off than equallty qualified minorities attending lower-ranked universities. In particular, we examine the expected earnings of minorities vs non-minorities attending elite vs less selective colleges and universities in China. The paper utilizes data from the 2002 Chinese Household Income Project to estimate the labor market return to graduating from college relative to high school to assess the impact of post-reform affirmative action in college/univerity admissions in China. Parameter estimates of heterogeneous treatment effects reveal that for minorities, the average treatment effect of earning a baccalaureate degree from colleges/universities ranked good and very good is high relative to the Han majority, and for those actually receiving the treatment from colleges/universities ranked good, and would be positive for those who could have earned a baccalaureate degree from colleges/universities ranked good and very good, but did not. Our results suggest that post-reform affirmative action education policies in China have been effective at improving the education and labor market outcomes of minorities, and that existing minority-Han disparities can be eliminated, and Chinese economic growth can be enhanced, by further expanding the pipeline of minorities that complete high school and enter into colleges/universities that grant baccalaureate degrees. Our findings suggest that the mismatch hypothesis cannot be viewed as a universal phenomenon that renders affirmative action in college/university admissions an ineffective policy tool to redress/remedy historic discrimination against minority groups.
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