Affirmative Action, Mismatch, and Economic Mobility after California's Proposition 209

Proposition 209 banned race-based affirmative action at California public universities in 1998. This study analyzes Prop 209's impact on student outcomes using a difference-in-difference research design and a newly-constructed longitudinal database linking all 1994-2002 University of California applicants to their college enrollment, course performance, major choice, degree attainment, and wages into their mid-30s. Ending affirmative action caused UC's 10,000 annual underrepresented minority (URM) freshman applicants to cascade into lower-quality public and private universities. URM applicants' undergraduate and graduate degree attainment declined overall and in STEM fields, especially among lower-testing applicants. As a result, the average URM UC applicant's wages declined by 5 percent annually between ages 24 and 34, almost wholly driven by declines among Hispanic applicants. By the mid-2010s, Prop 209 had caused a cumulative decline in the number of early-career URM Californians earning over $100,000 by at least 3 percent. Prop 209 also deterred thousands of qualified URM students from applying to any UC campus. Enrolling at less-selective UC campuses did not improve URM students' performance or persistence in STEM course sequences. Complementary regression discontinuity and institutional value-added analyses suggest that affirmative action's net wage benefits for URM applicants exceed its (potentially small) net costs for on-the-margin white and Asian applicants. These findings are inconsistent with the university "Mismatch Hypothesis" and provide the first causal evidence that banning affirmative action exacerbates socioeconomic inequities.