ABSTRACT: Most Canadian universities and colleges participate in co-operative education programs whereby each year more than 80,000 co-op students alternate between dedicated for-credit work terms and school terms. Many of these programs use a minimum sums algorithm to match students to jobs. We show that this algorithm and all its variations may produce unstable outcomes. We compare experimentally the properties of this algorithm and seemingly improved variations with the deferred acceptance algorithm. While the improved versions of the minimum sums algorithm sometimes lead to more truthful reporting of preferences and increase the likelihood of a stable assignment, they all fare worse than the deferred acceptance algorithm. Our data reveal that the superior outcomes associated with deferred acceptance are the result of both the algorithm itself and the behavioral responses it elicits. The continued use of the minimum sums algorithm has adverse consequences for human capital accumulation and lifetime income.
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