Opinion – Michael França: ‘If I could I wouldn’t be a social problem’: post on economy and inequality

The debate about inequality has widened. It is known that the difference in the opportunities given to individuals explains part of the inequities throughout life. These initial differences spread and cause the results of tests used in admission processes in higher education to be often associated with the socioeconomic profile of the candidate.

If a university could choose between those with the same grade in Enem, but with different trajectories, how should they choose? Two young people with identical grades, but with different life trajectories, must have different skills, such as cognition and resilience. This is a situation in which prioritizing those with disadvantageous trajectories reduces inequalities and increases allocative efficiency.

So, why not reward the effort to overcome barriers imposed throughout life?

Mechanisms like bonuses are based on the idea that with a grade increase for socially disadvantaged candidates, merit is reinstated. But it is not always simple to know how much bonus to give in the grade. An alternative way is to group candidates with similar performances and prioritize the vulnerable. Selection for postgraduate economics centers could be made using this instrument.

Every year, hundreds of young people take the exam prepared by Anpec (National Association of Graduate Centers in Economics). In the end, there is a classification based on the candidates’ performance and, with that, the graduate centers try to attract those that are better positioned.

The exam has positive points, such as guaranteeing the possibility of access for those who have not graduated in economics and making it impossible to favor candidates without merit, but with influential personal connections.

However, the position in the ranking is directly related to socioeconomic conditions. Richer candidates have access to good preparatory courses. Low-income people do not have the same opportunity. These often spend their graduation working and studying.

The blind use of ranking neglects relevant information. The final grades, which generate the ranking, tend to vary differently across positions. In the most recent edition of the competition, the dispersion of candidates’ grades between 1st and 11th positions was of the same magnitude as the dispersion between 11th and 50th.

If we thought of relatively homogeneous groups regarding the final grade, the homogeneity criterion would be the same for these two groups. And, within those homogeneous, it is possible to reorder the candidates so as to prioritize those with adverse conditions.

However, the simple use of ranking by several centers is common. This practice generates potential loss of talent. Despite this, there are some solutions aimed at trying to reverse this situation.

The first would be to seek to aggregate candidates into homogeneous groups and use tie-breaking criteria based on socioeconomic conditions. The second is to support low-income applicants.

Last year at Insper, we launched the New Trajectories program. The initiative consists of offering some candidates free access to Insper’s preparatory course, a stipend and research training. The results, even on a small scale, point towards the effectiveness of the program.

Economists have turned to understanding the roots of our inequalities. However, there is considerable space within the graduate centers themselves for inequalities to be reduced and talented young people to prosper in the profession. The example we need to set at home.

This text was written in partnership with Sergio Firpo, professor of economics at Insper.

Furthermore, it is a tribute to the song “Problema Social”, by Fernandinho e Guara, performed by Neguinho da Beija-Flor.