Missed signals: The effect of ACT college-readiness measures on post-secondary decisions

In the face of shrinking government budgets and a growing need to train a high-skilled labor force, policymakers have become increasingly interested in cost-effective measures that induce more students to apply to and enroll in college. In this paper, we use a regression discontinuity design to identify the causal effect of students receiving information about their own college-readiness after taking the ACT on their subsequent college enrollment decisions. Using data from Colorado, where all high school students are required to take the ACT, we find that students who receive information that they are college-ready are no more likely to attend college than those that do not receive this information. We discuss possible reasons for these findings.