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The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach
Abstract
This paper examines the effect of attending the flagship state university on the earnings of 28 to 33 year olds by combining confidential admissions records from a large state university with earnings data collected through the state's unemployment insurance program. To distinguish the effect of attending the flagship state university from the effects of confounding factors correlated with the university's admission decision or the applicant's enrollment decision, I exploit a large discontinuity in the probability of enrollment at the admission cutoff. The results indicate that attending the most selective state university causes earnings to be approximately 20% higher for white men. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
... Higher-status elite institutions are often characterised by having greater per-pupil resources, smaller class sizes and providing well-equipped facilities and wider range of activities (13), which may affect the subsequent health of its attendees through several mechanisms. First, attendance at a high-status institution may lead to improved labour market outcomes (11,14) which in turn may benefit health (15). Net of economic pathways, peers at elite institutions tend to display different patterns in health behaviours and cultural norms (16,17), which could influence the health and health behaviours of those attending these institutions given the importance of peer effects on health behaviours (18)(19)(20). ...
... Such behaviours tend to persist into adulthood (43,44), which contributes to the beneficial associations found between private school attendance and health. Apart from behaviour factors, private school attendance is often associated with higher subsequent socioeconomic positions (11,14). This can favourably associate with BMI and blood pressure, either directly by increasing the affordability of healthy diet/activity or indirectly through better social connections and neighbourhood environment (45). ...
Background: Education is thought to benefit subsequent health. However, existing studies have predominantly focused on educational attainment while the type of educational institution attended has been overlooked, despite being important indictors of education resource, quality, and influencing subsequent socioeconomic outcomes. In this study, we investigated associations between type of high school or university attended and multiple subsequent health outcomes in mid-adulthood.
Methods: Data from the 1970 British Cohort Study were used (N=8 107). Type of high school attended (comprehensive; grammar; private) was ascertained at age 16 and type of university (classified as higher (Russell Group) or normal-status) was reported at age 42. We investigated ten health measures that capture cardiometabolic risks, physical capabilities, and cognitive function measured at age 46. Multivariable regression models were used, adjusting for sex and childhood socioeconomic, health and cognitive factors.
Results: In unadjusted models, private school and higher-status university attendance were favourably associated with most health outcomes. After adjusting for potential confounders, associations between private school attendance and cardiometabolic risks remained; associations for higher-status university attendance and cognitive function remained, while the association with other health outcomes were largely attenuated. For example, private school attendance was associated with 0.14 standard deviation (SD) (95% confidence interval (CI): 0.04, 0.23) lower body mass index (BMI) while higher-status university attendance was associated with a 0.16 SD (0.07, 0.26) better performance in memory (word list recall task) compared with normal-status university attendance.
Conclusions: The type of educational institution attended was associated with multiple health outcomes-it could therefore be an important under-researched component of health inequalities. Further research is warranted to test the causal nature of this relationship and its generalisability to more recently born cohorts given changes in secondary education and the expansion of higher education.
... It is well-known that education has high returns at the individual and aggregate economic levels (Acemoglu & Angrist, 2000;Card, 1999;Dickson & Harmon, 2011;Grossman, 2006). In addition, the literature almost unambiguously finds a positive wage premium for (subgroups of) graduates from universities with an elite status (Andrews et al., 2016;Anelli, 2016;Birch et al., 2009;Brand & Halaby, 2006;Brewer et al., 1999;Carroll, 2014;Carroll et al., 2018;Hoekstra, 2009;Sekhri, 2020), a higher quality (Black & Smith, 2004, 2006Hussain et al., 2009;Jung & Lee, 2016;Long, 2008;Thomas & Zhang, 2005;Weinstein, 2017) or a high student selectivity (Chen et al., 2012;Dale & Krueger, 2014, 2002Lindahl & Regnér, 2005;Milla, 2017;Monks, 2000;Thomas, 2003;Walker & Zhu, 2017). These results highlight that the choice of the university is of importance. ...
... Similar to the idea of elite universities, Hoekstra (2009) analyzes the effect of the US's so-called "flagship universities." He finds an earnings premium of around 24%, but only for white men using regression discontinuity. ...
The general literature shows a wage premium for graduates from high-quality, elite, or more selective universities. These results, however, were established for countries with a clear hierarchy of top universities, such as the US, England, and Australia. I evaluate if such an effect exists in Germany, where individual universities are top performing in some but not necessarily all fields. Further, the general differences between universities are smaller compared to, for example, the US. I use the University Ranking of the Quacquarelli Symonds (QS) and a revealed preference and acceptance (RPA) ranking based on high school GPA to measure the quality of a university. Both rankings show a wage premium of university graduates in IV regression in-between 5 and 13 percent within the first five years after graduation. The QS ranking is pronounced immediately after graduation, and the RPA ranking five years later. In the discussion, I argue that this points towards the signal effect being at place initially, while the human capital accumulation dominates the wage premium of top universities after that. In addition, the effect is particularly pronounced for women. JEL-Classification: I23, I24, I26, J24, J30, J31
... For example, baccalaureate aspirants who attend community colleges first are more likely to drop out than comparable students first entering four-year colleges and are 15-20% less likely, all other things being equal, to secure a baccalaureate degree (Dougherty, 1994;Long & Kurlaender, 2009;and Monaghan & Attewell, 2015). More generally, attending a more selective college is associated with greater likelihood of graduating from college and securing a well-paying job, even after controlling for student characteristics on entry to higher education (Alon & Tienda, 2005;Baker, Klasik, & Reardon, 2018;Black & Smith, 2004;Chetty, Friedman, Saez, Turner, & Yagan, 2020;Cohodes & Goodman, 2012;Hoekstra, 2009;Pascarella & Terenzini, 2005;Smith, Pender, Howell, & Hurwitz, 2012; however, see Dale & Krueger, 2002). ...
... Similar findings have been made about academic undermatching in majors, with Black and Hispanic students being underrepresented in STEM fields in comparison with students with Asian and White students with similar test scores and parental socioeconomic status (Porter & Umbach, 2006). The consequence of this undermatching is that such students more often drop out of college and get lower occupational and income returns than they might have otherwise (Cohodes & Goodman, 2014;Hoekstra, 2009;Roksa & Deutschlander, 2018;Kurlaender & Grodsky, 2013). ...
This paper examines how the process of making higher education choices in the United States—whether to enter higher education, attend a particular college, or follow a particular path through college—produces and legitimates social inequality. The paper’s central thesis is that a societal regime of many choices—while serving individual freedom and producing social well-being—produces societal inequality in a way that obscures that process of social reproduction for virtually all who participate in that choice regime. Students often make choices that do not serve their interests as well as they might wish, particularly if students are faced with many choices and do not have adequate information. The incidence of those suboptimal choices is not random but is socially stratified. It is higher for less advantaged people, and unequal provision of good information plays a crucial role in producing those socially stratified suboptimal choices. Secondly, the provision of many choices legitimates social inequality. Seemingly offered many choices in life, both the fortunate and unfortunate in society come to feel that much of the inequality they experience is due to their own actions and therefore is legitimate. The paper concludes by offering various prescriptions for reducing the socially stratifying impacts and ideological consequences of a high-choice regime.
... We use two empirical strategies to identify the effects of affirmative action on both its intended beneficiaries and on other students at UERJ. In majors with high take-up of affirmative action, we use a regression discontinuity (RD) design that compares applicants above and below the admission score cutoffs (Hoekstra, 2009;Kirkebøen et al., 2016). Our RD design identifies the returns to attending UERJ for applicants who were marginally-admitted through each track, and, in particular, through the affirmative action tracks. ...
... There is a large literature on the earnings returns to attending selective colleges and/or majors(Hoekstra, 2009;Saavedra, 2009;Hastings et al., 2013;Kirkebøen et al., 2016;Canaan and Mouganie, 2018;Hoxby, 2018;Anelli, 2020;Sekhri, 2020;Ng and Riehl, 2022). These papers typically do not have the data necessary to examine both job networks and earnings. ...
We examine the effects of an affirmative action policy at an elite Brazilian university that reserved 45 percent of admission slots for Black and low-income students. We find that marginally-admitted students who enrolled through the affirmative action tracks experienced a 14 percent increase in early-career earnings. But the adoption of affirmative action also caused a large decrease in earnings for the university's most highly-ranked students. We present evidence that the negative spillover effects on highly-ranked students' earnings were driven by both a reduction in human capital accumulation and a decline in the value of networking.
... Empirical research on the effects of education on obesity has mainly focused on years of schooling, a quantitative measure of education. Less has been done to investigate whether the quality of education matters. 1 Education quality -measured for instance by college admission standards or by instructional expenditures per student (see Brewer et al. (1999); Dale and Krueger (2002))may affect obesity because it influences income and earnings (Brewer et al. (1999); Dale and Krueger (2002); Hoekstra (2009)), years of education, cognition, marital status and the quality of peers (Fletcher and Frisvold (2011)). ...
... Previous literature has addressed the problem that selection into college type is non-random by comparing students of selective colleges and students admitted to these colleges who attended instead non-selective institutions (Dale and Krueger (2002)); by explicitly modeling high school students' choice of college (Brewer et al. (1999)); by comparing twin pairs (Behrman et al. (1996)); or by exploiting discontinuities in admission rules and a regression discontinuity design (Hoekstra (2009);Zimmerman (2019)). These studies have focused mainly on labor market returns to college selectivity. ...
... 3 This literature on college quality returns has broadly focused on the concepts of elite and selective institutions. The returns to attending elite schools, flagships universities and the most selective colleges in the US are more substantial than less selective schools, even after controlling for selection effects (Andrews et al., 2016;Behrman et al., 1996;Bowen et al., 2009;Brewer et al., 1999;Hoekstra, 2009;Hoxby, 2009;Loury and Garman, 1995). 4 In contrast, this paper brings Brazilian data into the discussion arena. ...
This paper decomposes the effect of college’s quality signalling on former students’ early labor market outcomes. We propose a new measure of the signal for college quality: the performance of the previous cohort that has graduated three years before the individual in the same institution and major. Using a unique administrative educational data set matched with the employer-employee data for Brazilian formal firms we are able to identify that an increase of 1 percentage point in the signal variable is related to up to 0.42% larger probability of being employed in the formal sector and an increase of up to 0.4% in the early career wage. We also investigate heterogeneity returns by gender, individual’s prior working experience and field of education. We control for both individual and institutional performance levels.
... At the same time, attending a more selective college was associated with increased earnings for students from low-income families. Hoekstra (2009) concluded that attending the most selective state university caused earnings to be approximately 20% higher for white men. Witteveen and Attewell (2017) suggested large earnings payoffs from attending a highly selective college both four and ten years after graduation with uneven returns for men and women, for different college majors, and for graduates with different family background characteristics. ...
College choice and choice of major are the most important decisions for future earnings. It is still unclear, however, what makes a greater difference—college or major—or whether a choice of college matters more for some majors, but not the others. Using cross-classified models and College Scorecard data, I show that a discipline is more consequential for future earnings than a college. The effect of STEM is substantial but is less pronounced at institutions with higher overall median earnings. The effect of college selectivity on earnings is more pronounced for non-STEM disciplines. Institutional characteristics—such as tuition, shares of graduates receiving different forms of financial aid, institutional size and location, and type of college—correlate with earnings of graduates. Racial and gender composition of an educational program correlate with expected earnings of its graduates even after control for other institutional and disciplinary characteristics. Models presented here provide a better understanding of the effect of college and major choices on future earnings.
... Our study also relates to the literature on college quality as network effects can be thought of as part of the returns to an institution's "quality". This literature generally attributes differences across schools to causal differences in the return to some measure of quality (Black and Smith, 2006;Hoekstra, 2009;Griffith and Rask, 2016;Andrews, Li, and Lovenheim, 2016;Goodman, Hurwitz, and Smith, 2017;Canaan and Mouganie, 2018;Mountjoy and Hickman, 2021), though there are notable exceptions to this finding (Dale and Krueger, 2002;Dale and Krueger, 2014). More skilled/connected peers can improve labor market prospects through channels entirely independent of human capital or signaling, the channels most commonly discussed in the college quality literature. ...
We provide the first evidence on the role of college networks in the re-employment of displaced workers. An extensive literature examines the consequences of layoffs, but the factors which facilitate re-employment are relatively under-studied. Using administrative data and a cross-cohort design, we find that network connections with actively-hiring employers increase the re-employment rate. This result is driven by re-employment at contact’s firms suggesting that a stronger network does not improve worker quality more broadly. These results suggest that college has the potential to improve employment outcomes beyond improved human capital and signaling.
... Indeed, his results-which are replicated in Table 3-show that when accounting for the existence of defiers by using the reordered instrument, the 2SLS estimate drops substantially to around 0.29 log-points. Nonetheless, the estimated effect is still considerably larger than the effect of roughly 20% suggested by other research on the returns to college (see for example Hoekstra 2009;Smith et al. 2020;Zimmerman 2014). ...
Standard two-stage least squares (2SLS) regression remains dominant in instrumental variables estimation of causal effects even though the literature has shown that 2SLS may be inconsistent when effects are heterogenous and the instrument is only valid when conditioning on covariates. To show that this is not merely a hypothetical threat, this paper re-estimates the returns to college using college proximity as an instrument based on the data from Card (Aspects of labour market behavior: essays in honour of John Vanderkamp, University of Toronto Press, Toronto, 1995). The results show that 2SLS yields systematically larger estimates of the returns to college than more flexible estimators based on the instrument propensity score. In the full sample, differences amount to about 50 to 100%. This is due to the implicit conditional-variance weighting performed by 2SLS. Moreover, in line with the theoretical prediction by Sloczynski (When should we (not) interpret linear IV estimands as LATE? IZA discussion papers 14349, Institute of Labor Economics (IZA), 2021), findings suggest that the impact of the conditional-variance weighting is larger when instrument groups are not roughly the same size. Thus, it is advised to use 2SLS with caution and use estimators based on the instrument propensity score instead when groups are of different size and covariates are predictive of the instrument.
... Delaney (2019) found, after adjusting for labour market risk and selection that the CWP for men increases, while it decreases for women. Hoekstra (2009) found that attending a flagship university led to wage premium of 20% for white men. ...
This study investigates the gender gap present in the relationship between obtaining a college degree and labour earnings in Japan, using a dataset that contains detailed information about the colleges from which the respondents graduated. In particular, we focus on the ranking of colleges as a factor. We find that obtaining a college degree, regardless of the college ranking, is positively correlated with higher earnings even after controlling educational and cultural experiences in childhood, for both men and women, but that this relationship is stronger for men. Moreover, graduating from a high-ranking college is positively and significantly associated with higher earnings for male workers only. Further, the relationship between a high-ranking college degree and women’s spousal labour earnings is positive and significant. Thus, opportunities to obtain higher education benefits are most likely connected to the different paths that men and women take to attain economic success.
... 102). Given the privileges afforded to students who attend elite colleges and universities (Brewer et al., 1999;Dale & Krueger, 2002;Cohodes & Goodman &, 2014;Hoekstra, 2009;Hout, 2012), it is unsurprising that demand for these institutions have steadily increased (Bound et al., 2009). For example, at elite institutions, "graduation is more certain (Bowen et al., 2009) and investment per student is higher (Hoxby, 2009)" (Hout, 2012, p. 388). ...
Despite a robust body of literature about the choice of students’ first postsecondary institution, we have little insight regarding transfer from four-year colleges and universities across socioeconomic groups. In this study, we argue that when entry to selective colleges reaches a heightened level of competitiveness, transfer may be employed by students from advantaged social backgrounds as an adaptive strategy to gain access. Using multinomial logistic regression, this study draws on data from BPS:04/09 to uncover whether transfer functions as a mechanism of adaptation that exacerbates class inequalities in higher education. We found that students from higher-socioeconomic quartiles who first enrolled in a selective institution are most likely to engage in lateral transfer, but mainly to another college even more prestigious. This study provides evidence of the role of college transfer in exacerbating class inequalities in higher education.
... One well-researched indicator for horizontal stratification is the quality of (higher) education institutions (Gerber & Cheung, 2008). Existing evidence on graduates' returns to attending prestigious institutions, however, is mixed: While economic papers referring to the Anglo-American context show that there are wage premiums for graduates from elite universities (Anelli, 2016;Brewer et al., 1999;Carroll et al., 2018;Hoekstra, 2009;MacLeod et al., 2017), other studies even from the same institutional context, i.e. highly stratified higher education systems like the US, do not find any statistically positive or even negative effects of graduating from top-performing institutions on wages (Berg Dale & Krueger, 2002Kirkeboen et al., 2016). ...
The German initiative of excellence was the most far-reaching political measure in university funding–a shift from an equal distribution of funds, rooted in Humboldt’s tradition, to large-scale merit-based funding. Recent studies have examined the question how the initiative has affected (in)equality in university funding; but as yet little is known about effects on graduates’ monetary returns for university degrees. We analyse whether a degree from a ‘university of excellence’ leads to a wage premium at labour market entry. Inspired by previous work that found advantages only for subgroups, we further analyse whether the excellence effect on wages differs by social background and gender. Applying a difference-in-differences approach in combination with a simulation study, we do not identify a statistically significant excellence premium in the wages for graduates of ‘universities of excellence’. Checking for effect heterogeneity, the overall result holds for different social backgrounds as well as for men and women. But even though the average treatment effect, university’s status of excellence, is not significant at the usual thresholds, at least a tendency towards higher wages in the short run is identifiable (at a significance level of 13%). Finally, we discuss our results in light of policy evaluation and social stratification processes.
... A recent literature (e.g.,Hoekstra, 2009;Hastings et al., 2013;Zimmerman, 2014) finds large impacts of selective universities for academically marginal students, employing regression discontinuity designs. Since we focus on top-ranked students, those findings do not speak directly to our results. ...
... Not only do students at the most selective institutions receive more focused faculty attention and wide-ranging resources, 5 they also have better labor market outcomes than similar students at not selective institutions. 6 I have argued here that a more complicated analysis of diversity and affirmative action arguments and outcomes is crucial to understanding the need for this policy. Acknowledging this does not distract from the important work being done to improve K-12 schooling, nor does it prevent us from employing additional means to recruit and retain a diverse student body (see the institutions in our six states that have outlawed affirmative action in higher education for some excellent examples). ...
... Dale andKrueger (2002, 2014) and Mountjoy and Hickman (2020) however, which control for the application sets of students, all suggest a very weak relationship. However, the work by Cunha and Miller (2014), which exploits very similar data and uses a similar approach to Mountjoy and Hickman (2020) find a strong relationship for universities in Texas, while several papers which have exploited discontinuities in university entry cutoffs to identify returns to specific universities have also found large effects (Anelli, 2018;Hoekstra, 2009;Hastings et al., 2013;Saavedra, 2008;Zimmerman, 2019). 2 We find a weak association between selectivity and returns throughout much of the selectivity distribution, but this becomes much stronger at the top end of the distribution. This suggests very large payoffs to attending the most elite universities in the UK. 3 ...
This thesis studies the interactions between parental background, education and later life outcomes. The first chapter analyses differences across England in the early career earnings of children from low-income families, and the role educational differences play in explaining this variation. Children from lowincome families who grew up in the lowest mobility areas are expected to end up around fifteen percentiles lower in the earnings distribution at age 28 than similar children from the highest mobility areas. Differences in educational achievement across areas can explain 25% of this variation for men, and more than 45% for women. This indicates that education policy can potentially play an important role in equalising opportunities for children from low-income families. A second chapter estimates the impact of different higher education degrees on earnings, controlling for the impact of parental background and prior attainment. It finds substantial variation in earnings returns within subjects and across universities with very similar selectivity levels, suggesting degree choices matter a lot for later-life earnings. These returns are poorly correlated with observable degree characteristics, implying students have to make potentially life changing degree choices based on limited information. The third chapter estimates “mobility rates” for all English universities, subjects and degrees, by combining access rates and labour market success of students from low-income families. It finds that less selective institutions outperform the most prestigious universities on this measure. Mobility rates are mostly uncorrelated with average earnings returns, which implies that any policies which restrict funding or access to courses with lower earnings returns can have negative implications for mobility. The final chapter looks at the intergenerational impact of parental unemployment. It finds a strong and persistent negative impact of paternal unemployment on the educational achievement and home ownership rates of women, though not of men.
... For example,Hoekstra (2009) finds that white men have 20 percent higher earnings when they barely meet an admissions threshold at a state flagship university. Canaan and Mouganie (2018) find that students who marginally pass a French high school exit exam enroll in higher-quality colleges and earn 12.5 percent more, despite no increase in the quantity of education. ...
This paper synthesizes what economists have learned about human capital since Becker (1962) into four stylized facts. First, human capital explains at least one-third of the variation in labor earnings within countries and at least half of the variation across countries. Second, human capital investments have high economic returns throughout childhood and young adulthood. Third, we know how to build foundational skills such as literacy and numeracy, and resources are often the main constraint. Fourth, higher-order skills such as problem-solving and teamwork are increasingly valuable, and the technology for producing these skills is not well understood. We know that investment in education works and that skills matter for earnings, but we do not always know why.
... First, the calculation here does not include variation in education quality between workers with the same level of attainment. Quality adjustment is particularly important, because nearly all expansion 3 For example, Hoekstra (2009) finds that white men have 20 percent higher earnings when they barely meet an admissions threshold at a state flagship university. Canaan and Mouganie (2018) find that students who marginally pass a French high school exit exam enroll in higher-quality colleges and earn 12.5 percent more, despite no increase in the quantity of education. ...
Although many students suffer from anxiety and depression, and often identify school pressure and concerns about their futures as the main reasons for their worries, little is known about the consequences of the schooling environment on students’ mental health. Using a regression discontinuity analysis in the largest Norwegian cities, we show that eligibility to enrol in a higher achievement high school increases the probability of enrolment in higher education and decreases the probability of diagnosis or treatment of psychological conditions. We provide suggestive evidence that changes in both teacher and peers’ characteristics are likely drivers of these effects.
Recently, universities are under increasing public and government pressure to demonstrate the implementation of quality processes. In the present study we analyze what represents the concept of quality in higher education, how we differentiate the services offered by universities in terms of quality, what is the role of risk management in quality assurance. Several researches provided by various scientific sources, international standards in the field of quality, the experience of some foreign universities regarding the implementation of risk management are analyzed. The experience of the public institution, the Academy of Economic Studies from Moldova, was also presented, although not very extensive in the analyzed field. The conclusions we reached relate to the need to promote an effective communication in the field of quality assurance and risk management at the institutional level, the implementation of a risk culture at the institution level. Only in such conditions, the efforts made by the management of the institution can bring the expected results.
More than one-third of Russia’s labour force has a university diploma. With rapid massification, higher education quality turns into one of the key determinants of graduates’ earnings, at least at labour market entry. This paper focuses on two measures of educational quality (level of university selectivity and honors degree) and analyzes their association with graduates’ success in the Russian labour market. Using nationwide administrative data, this paper explores early-career labour market outcomes of Russian graduates with bachelor’s and specialist’s degree. The results suggest the existence of a significant wage premium associated with graduating from more selective universities. The observed positive effect consists of three components: individual abilities, social environment (i.e., networking possibilities and peer-effects), and quality of training. Having an honors diploma is also significantly positively related to early career outcomes, contrary to common belief.
One million international students study in the United States each year, and the majority of them compete in global labor markets after graduation. I conducted a large-scale field experiment and a companion employer survey to study how employers in China value U.S. college education. I sent more than 27,000 fictitious online applications to business and computer science jobs in China, randomizing the country of college education. I find that U.S.-educated applicants are on average 18% less likely to receive a callback than applicants educated in China, with applicants from very selective U.S. institutions underperforming those from the least selective Chinese institutions. The United States-China callback gap is smaller at high-wage jobs, consistent with employers fearing U.S.-educated applicants have better outside options and would be harder to hire and retain. The gap is also smaller at foreign-owned firms, consistent with Chinese-owned firms knowing less about American education. Controlling for high school quality, test scores, or U.S. work experiences does not attenuate the gap, suggesting that the gap is not driven by employer perceptions of negative selection. A survey of 507 hiring managers at college career fairs finds consistent and additional supporting evidence for the experimental findings.
This paper was accepted by Yan Chen, behavioral economics and decision analysis.
Funding: This work was supported by the Industrial Relations Section at Princeton University and the Prize Fellowship in Social Sciences awarded by Princeton School of Public and International Affairs.
Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4745 .
The United States is experiencing state disinvestment from higher education and significant wealth inequality. This article documents how low‐income college students both experience and attempt to manage these contexts in their daily lives at a public flagship university in the American Midwest. We theorize these experiences as forms of precarity entailed by a culture and institutional form that we describe as the neoliberal majoritarian university (NMU). We argue that the concepts of precarity and of NMU provide a more robust framework for conceptualizing the consequences of college‐going for low‐income students than do conventional discourses of social mobility, college affordability, or student stress.
Study of the “returns to education” has been one of the most productive areas of research in labor economics for the last seven decades, and it is very likely that it will continue to be a major topic in the future. Understanding how and why investments in education impact upon later economic outcomes, and more precisely quantifying the “return,” is important for a range of questions relevant to both policymakers and individuals. Moreover, beyond the labor market, the “returns to education” literature has expanded to consider the impact of education on outcomes in a variety of additional domains. This chapter first reviews the theoretical foundations of the “returns to education” literature and key considerations for the implementation of the canonical model. It then surveys the empirical evidence on the private financial return to education and the impact of education on other life outcomes. The final part of the chapter considers the current research frontier in this literature and likely directions for future research. The primary pathway is expected to be the further development and estimation of models that are better able to characterize the education investment decision and relax the numerous strong assumptions embedded in the canonical model. An additional pathway is the continued development of research that addresses questions broadening the concept of the “returns to education” into areas that are yet to be fully explored in the existing literature.
We study the interaction between family and school inputs by identifying the causal impact of information about school quality on parental time investment into children. Inspection ratings provide news that shifts parental beliefs about school quality, and hence investment into children. We study this using household panel data from England, linked to administrative records on school inspection ratings. We find that parents receiving good news over school quality significantly decrease time investment into their children. We provide insights on the distributional and test score impacts of the nationwide inspections regime, through multiple margins of endogenous response of parents and children.
We use the introduction of the Texas Top Ten Percent rule to estimate the effect of access to a selective college on graduation and earnings outcomes for two groups of students. For highly ranked students at more disadvantaged high schools, who gained access under the policy, college enrollment and graduation increased. Less highly ranked students at more advantaged schools, who tended to lose access, shifted toward less-selective colleges under the policy, but did not see declines in overall college enrollment, graduation, or earnings. The policy thus benefited students targeted for admission without evidence of adverse effects on displaced students. (JEL I21, I23, I24, I26)
Background
Despite many initiatives to improve graduate student and faculty diversity in engineering, there has been little or no change in the percentage of people from racially minoritized backgrounds in either of these groups.
Purpose/Hypothesis
The purpose of this paper is to counter the scarcity fallacy, in which institutions blame the “shortage” of qualified people from traditionally marginalized backgrounds for their own lack of representation, related to prospective PhD students and prospective faculty from traditionally marginalized groups. This study identifies the BS-to-PhD and PhD-to-tenure-track-faculty institutional pathways of Black/African American and Hispanic/Latino engineering doctorate recipients.
Design/Method
Using the US Survey of Earned Doctorates, we tracked the BS-to-PhD institutional pathways of 3952 Black/African American and 5732 Hispanic/Latino engineering PhD graduates. We also used the Survey of Doctorate Recipients to track the PhD-to-tenure-track faculty pathways of 104 Black/African American and 211 Hispanic/Latino faculty.
Results
The majority of Black/African American and Hispanic/Latino PhD graduates in this study did not earn their BS degrees from Top 25 institutions, but rather from Not Top 25, non-US, and minority-serving institutions. The results also show the relatively small proportion of PhD earners and faculty members who move into highly ranked institutions after earning a bachelor's degree from outside this set of institutions.
Conclusions
The findings of this study have important implications for graduate student and faculty recruitment by illustrating that recruitment from a narrow range of institutions (i.e., Top 25 institutions) is unlikely to result in increased diversity among racially minoritized PhDs and faculty in engineering.
Monthly government transfer programs create cycles of consumption that track the timing of benefit receipt. If these cycles correspond to critical moments for student learning and achievement, the timing of transfers may have important long-run implications for low-income students. In this paper we exploit state-level variation in the staggered timing of nutritional assistance benefit issuance to analyze effects on academic achievement. Using individual-level data from a large national college admission exam, we find taking this high-stakes exam during the last two weeks of the SNAP benefit cycle reduces test scores and lowers the probability of attending a four-year college. (JEL H75, I18, I21, I23, I38)
Employing NCES databases, we investigate how college selectivity influences job satisfaction and prestige from the 1970s to the 1990s and across different racial categories. We find that the effect of college selectivity has essentially disappeared over time and that minority students are particularly disadvantaged with respect to job satisfaction.
We use a large and novel administrative dataset to investigate returns to different university ‘degrees’ (subject-institution combinations) in the United Kingdom. Conditioning on a rich set of background characteristics, we find substantial variation in returns across degrees with similar selectivity levels, suggesting students’ degree choices matter a lot for later-life earnings. Returns increase with university selectivity much more at the top of the selectivity distribution than further down, and much more for some subjects than others. Returns are poorly correlated with observable degree characteristics other than selectivity, which could have important implications for student choices and the incentives of universities.
This dissertation consists of two chapters studying the importance of household income for shaping student outcomes in the market for higher education in the United States. The first chapter uses the High School Longitudinal Study of 2009 to document that conditional on student ability, high-income students are more likely to enroll in college and are more likely to attend a highly selective college conditional on enrolling. These gaps are mostly explained by differences in application rates and in enrollment rates conditional on being admitted, rather than differences in admission rates. While students generally prefer to attend the most selective college they are accepted to, low-income students are less likely to attend their preferred college due to costs. These findings suggest that financial aid provided by colleges is generally insufficient in closing enrollment gaps, and that the observed application gaps may be rational: low-income students will choose not to apply if doing so is costly and they do not expect to receive sufficient aid if admitted. Motivated by the empirical findings of the first chapter, the second chapter builds and estimates an equilibrium model of the U.S. college market featuring tuition discrimination and a decentralized admissions system. Students who differ in their financial resources and innate ability apply to a subset of colleges and are uncertain about their prospective admissions and financial aid. Colleges observe a noisy signal of student ability and compete by choosing admissions standards and tuition schedules. According to the estimated model, differences in application rates between high- and low-income students, conditional on ability, are due to student expectations over admissions and financial aid, which are consistent with college policies in equilibrium. Low-income students receive generous financial aid at selective colleges because only the highest-ability among them apply, making their signals highly informative. If signals became less informative (e.g., colleges stopped using the SAT), all high-ability students would be worse off and only high-income, low-ability students would modestly benefit. Finally, the model suggests that increasing federal need-based financial aid greatly benefits low-income, high-ability students by alleviating credit constraints.
After higher education expansion in the private sector and technical college system starting in 1985, students’ opportunities to attend four-year institutions in Taiwan are increasing. This study extends Cabrera and La Nasa’s model of student college choice to examine not only choices of institutional types but choices of college pathways after students attend college. This study uses longitudinal survey data from the Taiwan Education Panel Survey (TEPS) and its follow-ups, the Taiwan Education Panel Survey and Beyond (TEPS-B), which followed a cohort of students from their high school sophomore year to when they were 25–26 years old, and which spanned the time period from 2001–2010. Analysing these data, our findings show that students from a lower socioeconomic background are more likely to attend less selective institutional types, but sometimes at the same time, they pay a higher tuition price – indicating a regressive higher education system in Taiwan. In addition, both analytical ability and educational aspiration influence students in choosing initial institutional types. After entering college, in addition to family background and ability, parental involvement, high school resources, and the type of higher education institution first attended play important roles in shaping students’ college pathways.
This paper examines how short-term variation in potential teachers’ outside options affects who chooses to teach in public schools. I use variation in state level unemployment rates as a source of plausibly exogenous variation in outside options available to first-year teachers among teachers surveyed in the NCES School and Staffing Survey. I find that those who become teachers when the local labor market is weak are both more likely to have come from highly selective colleges and more likely to express dissatisfaction with their jobs. Other observable demographic, educational, and certification characteristics of newly hired teachers are not affected. Teachers who enter during weaker labor markets are also no less likely to remain in teaching in the short run. Economic downturns provide a potential opportunity for schools to attract and retain academically talented workers, but this may come at a cost to those workers in the form of reduced job satisfaction.
This paper investigates the impact of experiencing a backorder on customers’ purchase behaviors the next four years.
We show that the treatment effect estimated by standard methods such as regression discontinuity analysis or difference-in-differences may contain a transient “learning effect” that is entangled with the long-term effect of the treatment. This learning effect occurs when the variable of interest is the agents’ efforts, when treatment and control correspond to success or failure: success or failure gives agents information about how much their effort matters, and consequently changes the amount of effort they provide after treatment. We examine the impact of the learning effect and when it is likely to be substantial. (JEL C13, C21, D72, D74, D83, I20)
The economic returns to attending college are a crucial aspect of discussions surrounding student debt and rising tuition. As higher quality data on student outcomes has become available, studies have attempted to quantify the financial value of a college degree across different dimensions and contexts (Webber, 2014; Webber, 2016; Itzkowitz, 2021; Cooper, 2021; Miller and Akabas, 2022).
Históricamente, la educación superior es considerada una de las principales rutas de movilidad social ascendente. Sin embargo, debido a la pluralidad de opciones que ofrece el sistema educativo en este nivel, es posible que exista un patrón distintivo no sólo de origen socioeconómico sino también de resultados económicos después de egresar de alguna institución de educación superior (IES) específica, lo que puede inhibir la promoción de la movilidad social mediante las IES. A partir de datos del módulo de movilidad social intergeneracional 2016, este trabajo analiza si las IES en México promueven la movilidad social de sus egresados. Los resultados sugieren un potencial efecto de mediación de las IES en la transmisión intergeneracional de la riqueza. Esto significa que la riqueza del hogar de origen es un determinante importante del tipo de IES del cual egresan los encuestados y, además, este último también explica parte de la variación en la riqueza del hogar actual de los egresados. En específico, el grupo de personas que reportó haber concluido sus estudios universitarios en el Instituto Politécnico Nacional (IPN) presenta la menor correlación intergeneracional de la riqueza: 0.18. En contraste, las escuelas normales y la Universidad Pedagógica Nacional (UPN) presentan las tasas de persistencia intergeneracional más altas, 0.48 y 0.47, respectivamente. Con esos hallazgos se arguye que el tipo de IES del que egresan los individuos puede complementar la explicación de los mecanismos de persistencia intergeneracional de la riqueza.
Although a substantial and rising labor market premium is associated with college attendance in general, little is known about how this premium varies across institutions of different types and across time. In this paper we explicitly model high school students' choice of college type (characterized by selectivity and control) based on individual and family characteristics (including ability and parental economic status) and an estimate of the net costs of attendance. We estimate selectivity-corrected outcome equations using data from both the National Longitudinal Study of the High School Class of 1972 and High School and Beyond, which permit us to determine the effects of college quality on wages and earnings and how this effect varies across time. Even after controlling for selection effects, strong evidence emerges of a significant economic return to attending an elite private institution, and some evidence suggests this premium has increased over time.
We outline a framework for causal inference in setting where assignment to a binary treatment is ignorable, but compliance with the assignment is not perfect so that the receipt of treatment is nonignorable. To address the problems associated with comparing subjects by the ignorable assignment--an "intention-to-treat analysis"--we make use of instrumental variables, which have long been used by economists in the context of regression models with constant treatment effects. We show that the instrumental variables (IV) estimand can be embedded within the Rubin Causal Model (RCM) and that under some simple and easily interpretable assumptions, the IV estimand is the average causal effect for a subgroup of units, the compliers. Without these assumptions, the IV estimand is simply the ratio of intention-to-treat causal estimands with no interpretation as an average causal effect. The advantages of embedding the IV approach in the RCM are that it clarifies the nature of critical assumptions needed for a causal interpretation, and moreover allows us to consider sensitivity of the results to deviations from key assumptions in a straightforward manner. We apply our analysis to estimate the effect of veteran status in the Vietnam era on mortality, using the lottery number assigned priority for the draft as an instrument, and we use our results to investigate the sensitivity of the conclusions to critical assumptions. Statistics Version of Record
The twelfth century rabbinic scholar Maimonides proposed a maximum class size of 40. This same maximum induces a nonlinear
and nonmonotonic relationship between grade enrollment and class size in Israeli public schools today. Maimonides' rule of
40 is used here to construct instrumental variables estimates of effects of class size on test scores. The resulting identification
strategy can be viewed as an application of Donald Campbell's regression-discontinuity design to the class-size question.
The estimates show that reducing class size induces a significant and substantial increase in test scores for fourth and fifth
graders, although not for third graders.
We outline a framework for causal inference in settings where assignment to a binary treatment is ignorable, but compliance with the assignment is not perfect so that the receipt of treatment is nonignorable. To address the problems associated with comparing subjects by the ignorable assignment - an "intention-to-treat analysis" - we make use of instrumental variables, which have long been used by economists in the context of regression models with constant treatment effects. We show that the instrumental variables (IV) estimand can be embedded within the Rubin Causal Model (RCM) and that under some simple and easily interpretable assumptions, the IV estimand is the average causal effect for a subgroup of units, the compliers. Without these assumptions, the IV estimand is simply the ratio of intention-to-treat causal estimands with no interpretation as an average causal effect. The advantages of embedding the IV approach in the RCM are that it clarifies the nature of critical assumptions needed for a causal interpretation, and moreover allows us to consider sensitivity of the results to deviations from key assumptions in a straightforward manner. We apply our analysis to estimate the effect of veteran status in the Vietnam era on mortality, using the lottery number that assigned priority for the draft as an instrument, and we use our results to investigate the sensitivity of the conclusions to critical assumptions.
Using data on 19,000 whole siblings, it is shown that earnings vary significantly among students who have graduated from different colleges. The cross-section estimates are up to twice the within-family estimates, indicating that a regression estimator of college effects that does not adjust properly for family characteristics will overestimate the earnings premium of college. This study also shows that the effects of college choice vary between sisters and brothers and that there is a relationship between teacher quality and the college effects. These findings suggest that there is no straightforward interpretation of college in individual earnings equations.
A regression discontinuity (RD) research design is appropriate for program evaluation problems in which treatment status (or the probability of treatment) depends on whether an observed covariate exceeds a fixed threshold. In many applications the treatment-determining covariate is discrete. This makes it impossible to compare outcomes for observations “just above” and “just below” the treatment threshold, and requires the researcher to choose a functional form for the relationship between the treatment variable and the outcomes of interest. We propose a simple econometric procedure to account for uncertainty in the choice of functional form for RD designs with discrete support. In particular, we model deviations of the true regression function from a given approximating function—the specification errors—as random. Conventional standard errors ignore the group structure induced by specification errors and tend to overstate the precision of the estimated program impacts. The proposed inference procedure that allows for specification error also has a natural interpretation within a Bayesian framework.
We estimate the effects of college quality using propensity score matching methods and the National Longitudinal Survey of Youth 1979 cohort. Matching allows us to relax the linear functional form assumption implicit in regression-based estimates. We also examine the support problem by determining whether there are individuals attending low-quality colleges similar to those attending high-quality colleges, and find that the support condition holds only weakly. Thus, the linear functional form plays an important role in regression-based estimates (and matching estimates have large standard errors). Point estimates from regression and matching are similar for men but not women.
The authors assess the impact of college quality on women's earnings and the influence of family and individual endowments on college choice using new data from a survey of identical and nonidentical twins born in Minnesota. The estimates reject models that ignore school choice. The statistically preferred estimates suggest that Ph.D.-granting, private universities with well-paid senior faculty and smaller enrollments produce students who have significantly higher earnings later in life. Both the quantity of schooling and the quality of schooling resources are allocated to higher-endowed individuals, which exacerbates preexisting inequality in human capital and biases conventional estimates of school quality effects. Copyright 1996 by MIT Press.
Estimates of the effect of college selectivity on earnings may be biased because elite colleges admit students, in part, based
on characteristics that are related to future earnings. We matched students who applied to, and were accepted by, similar
colleges to try to eliminate this bias. Using the College and Beyond data set and National Longitudinal Survey of the High
School Class of 1972, we find that students who attended more selective colleges earned about the same as students of seemingly
comparable ability who attended less selective schools. Children from low-income families, however, earned more if they attended
selective colleges.
We develop a model of optimal schooling investments and estimate it using new data on approximately 700 identical twins. We estimate an average return to schooling of 9 percent for identical twins, but estimated returns appear to be slightly higher for less able individuals. Simple cross-section estimates are marginally upward biased. These empirical results imply that abler individuals attain more schooling because they face lower marginal costs of schooling, not because of higher marginal benefits. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
While there is a substantial literature on the relationship between general teacher characteristics and student learning, school districts and states often rely on in-service teacher training as a part of school reform efforts. Recent school reform efforts in Chicago provide an opportunity to examine in-service training using a quasi-experimental research design. In this paper, we use a regression discontinuity strategy to estimate the effect of teacher training on the math and reading performance of elementary students. We find that marginal increases in-service training have no statistically or academically significant effect on either reading or math achievement, suggesting that modest investments in staff development may not be sufficient to increase the achievement of elementary school children in high poverty schools.
We use data on 19 000 siblings to investigate whether earnings vary among students who graduated from different colleges in Sweden. We run separate within-family regressions for whole siblings, sisters and brothers. The results show that earnings vary significantly among students who have graduated from different colleges. The cross-sectional estimates are up to twice the within-family estimates, showing that a regression estimator of college effects that does not adjust properly for family characteristics will overestimate the earnings premium of college type as well as the differences in earnings after graduation from different colleges. There is a significant relationship between college type and earnings, even when we control for area of residence after college education. The paper also examines the extent to which differences among colleges, in the proportion of teachers with doctoral degrees, explain the differences in earnings premium. We find that the earnings premium of college type becomes insignificant when adding the proportion of teachers with doctoral degrees to the analysis.
Ž. THE REGRESSION DISCONTINUITY RD data design is a quasi-experimental design with the defining characteristic that the probability of receiving treatment changes discontinuously as a function of one or more underlying variables. This data design arises frequently in economic and other applications but is only infrequently exploited as a source of identifying information in evaluating effects of a treatment. In the first application and discussion of the RD method, Thistlethwaite and Campbell Ž. 1960 study the effect of student scholarships on career aspirations, using the fact that awards are only made if a test score exceeds a threshold. More recently, Van der Klaauw Ž. 1997 estimates the effect of financial aid offers on students’ decisions to attend a particular college, taking into account administrative rules that set the aid amount partly on the basis of a discontinuous function of the students’ grade point average and SAT Ž. score. Angrist and Lavy 1999 estimate the effect of class size on student test scores, taking advantage of a rule stipulating that another classroom be added when the average Ž. class size exceeds a threshold level. Finally, Black 1999 uses an RD approach to estimate parents’ willingness to pay for higher quality schools by comparing housing prices near geographic school attendance boundaries. Regression discontinuity methods have potentially broad applicability in economic research, because geographic boundaries or rules governing programs often create discontinuities in the treatment assignment mechanism that can be exploited under the method. Although there have been several discussions and applications of RD methods in the literature, important questions still remain concerning sources of identification and ways of estimating treatment effects under minimal parametric restrictions. Here, we show that identifying conditions invoked in previous applications of RD methods are often overly strong and that treatment effects can be nonparametrically identified under an RD design by a weak functional form restriction. The restriction is unusual in that it requires imposing continuity assumptions in order to take advantage of the known discontinuity in the treatment assignment mechanism. We also propose a way of nonparametrically estimating treatment effects and offer an interpretation of the Wald estimator as an RD estimator.
College Choice and Wages: Estimates Using Data on Female TwinsHow Robust Is the Evidence on the Effects of College Quality? Evidence from Matching
- Behrman
- Mark Jere
- Paul Rozenzweig
- Black
- Jeff Dan
- Smith
Behrman, Jere, Mark Rozenzweig, and Paul Taubman. 1996. “College Choice and Wages: Estimates Using Data on Female Twins.” The Review of Economics and Statistics 78: 672-685 Black, Dan, and Jeff Smith. 2004. “How Robust Is the Evidence on the Effects of College Quality? Evidence from Matching.” Journal of Econometrics 121: 99-124
- Jacob Mincer
- Schooling
- Earnings Experience
Mincer, Jacob, Schooling, Experience, and Earnings (New York: National Bureau of
Economic Research, 1974).