Extended

The undergraduate admissions in Indonesia's public universities are interestingly conducted in a two-fold system. Students are ?rst considered for the merit-based 'Invitation' admissions, whereas the test-based admissions are conducted afterwards. This study aims to discuss the differences of academic performances of students entering universities through the merit-based and test-based admissions. Our discussion utilizes a comprehensive data of 5,470 freshmen admitted during the period 2001 to 2017 at the Faculty of Economics and Business of Universitas Indonesia. We observed the differences using regression and matching estimates controlling the students' characteristics and demographics. The ?ndings suggest that students admitted through the Invitation system perform generally better. However, such differences in academic performance diminish across time. Furthermore, we describe the potential problems and, at the same time, progress for the country's education system posed by the phenomenon.