Here is a long but informative essay on historical trends in college admissions.

INCREASINGLY COMPETITIVE COLLEGE ADMISSIONS: MUCH MORE THAN YOU WANTED TO KNOW
POSTED ON APRIL 15, 2019
BY SCOTT ALEXANDER

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6. Conclusions

1. There is strong evidence for more competition for places at top colleges now than 10, 50, or 100 years ago. There is medium evidence that this is also true for upper-to-medium-tier colleges. It is still easy to get into medium-to-lower-tier colleges.

2. Until 1900, there was no competition for top colleges, medical schools, or law schools. A secular trend towards increasing admissions (increasing wealth + demand for skills?) plus two shocks from the GI Bill and the Vietnam draft led to a glut of applicants that overwhelmed schools and forced them to begin selecting applicants.

3. Changes up until ten years ago were because of a growing applicant pool, after which the applicant pool (both domestic and international) stopped growing and started shrinking. Increased competition since ten years ago does not involve applicant pool size.

4. Changes after ten years ago are less clear, but the most important factor is probably the ease of applying to more colleges. This causes an increase in applications-per-admission which is mostly illusory. However, part of it may be real if it means students are stratifying themselves by ability more effectively. There might also be increased competition just because students got themselves stuck in a high-competition equilibrium (ie an arms race), but in the absence of data this is just speculation.

5. Medical schools are getting harder to get into, but law schools are getting easier to get into. There is no good data for graduate schools.

6. All the hand-wringing about getting into good colleges is probably a waste of time, unless you are from a disadvantaged background. For most people, admission to a more selective college does not translate into a more lucrative career or a higher chance of admission to postgraduate education. There may be isolated exceptions at the very top, like for Supreme Court justices.

I became interested in this topic partly because thereís a widespread feeling, across the political spectrum, that everything is getting worse. I previously investigated one facet of this Ė that necessities are getting more expensive Ė and found it to be true. Another facet is the idea that everything is more competitive and harder to get into. My parentsí generation tells stories of slacking off in high school, not worrying about it too much, and knowing theyíd get into a good college anyway. Millennials tell stories of an awful dog-eat-dog world where you can have perfect grades and SAT scores and hundreds of hours of extracurriculars and still get rejected from everywhere you dreamed of.

I donít really have a strong conclusion here. At least until ten years ago, colleges were harder to get into because more people were able to (or felt pressured to) go to college. The past ten years are more complicated, but might be because of increased stratification by ability. Is that good or bad? Iím not sure. I still donít feel like I have a great sense of what, if anything, went wrong, whether our parentsí rose-colored picture was accurate, or whether thereís anything short of reversing all progress towards egalitarianism that could take us back. Iím interested to get comments from people who understand this area better than I do.