| Chapter 1 documents the extent of variation in the composition of peer quality across a large sample of schools in the United States and Canada, and discusses the relation between this variation and specialization of schools. The lists of deviant schools in peer quality composition overlaps with the list of schools that are known to be specializing by reputation. The findings of this discussion motivate the analysis in the second chapter of this dissertation.;Chapter 2 develops a differentiated products model of school competition that distinguishes among different dimensions that matter in the skill acquisition process. The model predicts that when identical schools compete for students, specialization may arise as a competition strategy. This serves rich students' education goals well. Poorer students, however, may attend schools with specializations that do not cater to their relative strengths. By doing so, these poorer students complement the weaknesses of the richer students through peer effects and receive financial aid in return. The empirical analysis provides strong support for the model's predictions about within-school implications of specialization.;Profiling in college admissions arises when applicant attributes are given weight because they are correlated with unobservable student characteristics that the college values. Chapter 3 models the admission process of a single college as a bargaining game between the college and a potential student with sequential moves and asymmetric information. We test the empirical implications of this model using a unique data set from a private college in the US. We find that the empirical evidence is consistent with the notion that signaling and profiling are important aspects of the college admission process. |
