Catholic schools compete with public schools but may also cream-skim. The endogeneity of private school enrollment necessitates 2SLS. Measures of Catholic sex abuse scandals instrument for Catholic school enrollment. We find that competition from Catholic schools raises public school test scores.

Many states are outlawing the use of affirmative action, which has lead to the use of inefficient measures as a substitute. I show that schools still use affirmative action in the application process because of a down-stream demand from employers.