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Abstract We analyze how test-optional admissions affect students’ job market outcomes. We conduct an experiment that corrects employers’ misperceptions about the prevalence of test-optional admissions in Japan, where both test-optional and test-based admissions co-exist within the same schools and programs. We find that test-optional admissions function as a signal of students’ ability and induce statistical discrimination against test-optional applicants during resume screening. This discount is particularly pronounced at lower-ranked institutions, which tend to enroll students from lower socioeconomic backgrounds. Consequently, the adoption of test-optional admissions may disproportionately harm these students in the labor market. We analyze how test-optional admissions affect students’ job market outcomes. We conduct an experiment that corrects employers’ misperceptions about the prevalence of test-optional admissions in Japan, where both test-optional and test-based admissions co-exist within the same schools and programs. We find that test-optional admissions function as a signal of students’ ability and induce statistical discrimination against test-optional applicants during resume screening. This discount is particularly pronounced at lower-ranked institutions, which tend to enroll students from lower socioeconomic backgrounds. Consequently, the adoption of test-optional admissions may disproportionately harm these students in the labor market. This experiment is preregistered at OSF, which can be found at http://osf.io/xzrk4/overview
Last Published March 05, 2026 06:03 AM March 07, 2026 02:15 AM
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