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In this paper, I review the economics literature on for-profit college education in the United States, assessing what we know about institutional behavior and student outcomes after two decades of research. The many studies reviewed here reveal some consistent patterns. It is clear that for-profits compete with institutions in other sectors, yet they behave differently than their public and nonprofit counterparts. The literature is mixed on the responsiveness of the sector to labor market demands, but any responsiveness does not appear to translate to better student outcomes. The vast majority of studies on employment and earnings gains for students in for-profits find worse outcomes for for-profit students relative to similar students in other sectors. These disappointing results suggest that additional accountability measures may be warranted to protect students and taxpayers.
Despite the growing evidence of informational interventions on college and major choices, we know little about how such light-touch interventions affect the gender gap in STEM majors. Linking survey data to administrative records of Chinese college applicants, we conducted a large-scale randomized experiment to examine the STEM gender gap in the major preference beliefs, application behaviors, and admissions outcomes. We find that female students are less likely to prefer, apply to, and enroll in STEM majors, particularly Engineering majors. In a school-level cluster randomized controlled trial, we provided treated students with major-specific wage information. Students’ major preferences are easily malleable that 39% of treated students updated their preferences after receiving the wage informational intervention. The wage informational intervention has no statistically significant impacts on female students’ STEM-related major applications and admissions. In contrast, those male students in rural areas who likely lack such information are largely shifted into STEM majors as a result of the intervention. We provide supporting evidence of heterogeneous major preferences for extrinsic incentives: even among those students who are most likely to be affected by the wage information (prefer high paying majors and lack the wage information), female students are less responsive to the informational intervention.
We provide theory and evidence about how the design of college financial aid programs affects a variety of high school, college, and life outcomes. The evidence comes from an eight-year randomized trial where 2,587 high school ninth graders received a $12,000 merit-based grant offer. During high school, the program increased their college expectations and non-merit effort but had no effect on merit-related effort (e.g., GPA). After high school, the program increased graduation from two-year colleges only, apparently because of the free college design/framing in only that sector. But we see no effects on incarceration or teen pregnancy. Overall, the results suggest that free college affects student outcomes in ways similar to what advocates of free college suggest and making aid commitments early, well before college starts, increases some forms of high school effort. But we see no evidence that merit requirements are effective. Both the standard human capital model and behavioral economics are required to explain these results.
After increasing in the 1970s and 1980s, time to bachelor’s degree has declined since the 1990s. We document this fact using data from three nationally representative surveys. We show that this pattern is occurring across school types and for all student types. Using administrative student records from 11 large universities, we confirm the finding and show that it is robust to alternative sample definitions. We discuss what might explain the decline in time to bachelor’s degree by considering trends in student preparation, state funding, student enrollment, study time, and student employment during college.
Graduate student teaching assistants from underrepresented groups may provide salient role models and enhanced instruction to minority students in STEM fields. We explore minority student-TA interactions in an important course in the sciences and STEM – introductory chemistry labs – at a large public university. The uncommon assignment method of students to TA instructors in these chemistry labs overcomes selection problems, and the small and active learning classroom setting with required attendance provides frequent interactions with the TA. We find evidence that underrepresented minority students are less likely to drop courses and are more likely to pass courses when assigned to minority TAs, but we do not find evidence of effects for grades and medium-term outcomes. The effects for the first-order outcomes are large with a decrease in the drop rate by 5.5 percentage points on a base of 6 percent, and an increase in the pass rate of 4.8 percentage points on a base of 93.6 percent. The findings are similar when we focus on Latinx student - Latinx TA interactions. The findings are robust to first-time vs. multiple enrollments in labs, specifications with different levels of fixed effects, limited choice of TA race, limited information of TAs, and low registration priority students. The findings have implications for debates over increasing diversity among PhD students in STEM fields because of spillovers to minority undergraduates.
Enrollment increased slightly at both the California State University and University of California systems in fall 2020, but the effects of the pandemic on enrollment in the California Community College system are mostly unknown and might differ substantially from the effects on 4-year colleges. This paper provides the first analysis of how the pandemic impacted enrollment patterns and the academic outcomes of community college students using administrative college-level panel data covering the universe of students in the 116-college California Community College system. We find that community college enrolment dropped precipitously in fall 2020 – the total number of enrolled students fell by 4 percent in spring 2020 and by 15 percent in fall 2020 relative to the prior year. All racial and ethnic groups experienced large enrollment decreases in spring and fall 2020, but African-American and Latinx students experienced the largest drops at 17 percent in fall 2020. Enrollment fell the most for first-year students in the community college system, basic skills courses, and fields such as engineering/industrial technology, education, interdisciplinary studies, and art. There were smaller decreases for continuing students, academic courses transferable to four-year institutions, and business and science fields. Enrollment losses were felt throughout the entire community college system, and there is no evidence that having a large online presence in prior years protected colleges from these effects. In terms of course performance, there was a larger disruption to completion rates, withdrawal rates, and grades in spring 2020 than in fall 2020. These early findings of the effects of the pandemic at community colleges, which serve higher percentages of lower-income and minority students, have implications for policy, impending budgetary pressures, and future research.
Many state governments impose tuition regulations on universities in pursuit of college affordability. How effective are these regulations? We study how universities' "sticker price'' and institutional financial aid change during and after tuition caps and freezes by leveraging temporal and geographic variation in the United States from 1990 to 2013. We find that listed tuition is lower than it would have been in the absence of the regulation by 6.3 (9.3) percentage points at four-year (two-year) colleges during the regulation. Meanwhile, the negative impact on institutional aid at four-year colleges during a tuition cap/freeze is nearly double (-11.3 percentage points) the impact on listed tuition, implying that universities adjust institutional aid in order to recoup some of their losses from the tuition cap/freeze. Effects are long-lasting at four-year institutions; two years after the regulation is lifted, tuition is 7.3 percentage points lower and institutional aid is 19.5 percentage points lower than it would have been without the regulation. Meanwhile at two-year colleges, tuition "catches up" so that by three years after the end of the regulation tuition is not statistically different from what it would have been in the absence of the regulation. Universities that are not research-intensive and universities that have a greater dependency on tuition revenue exhibit larger negative impacts on institutional aid with smaller impacts on "sticker price''. Our estimates suggest that tuition caps and freezes do not simply lower the prices that students pay for college and that the benefit of tuition regulations is unequally spread across types of universities and students.
We explore the role of defaults and choice architecture on student loan decision-making, experimentally testing the impact pre-populating either decline or accept decisions compared to an active choice, no pre-population, decision. We demonstrate that the default choice presented does influence student loan borrowing decisions. Specifically, compared to active choice, students presented within a pre-populated decline decision were almost five percent less likely to accept all packaged loans and borrowed between 4.6 and 4.8 percent less in federal educational loans. The reductions in borrowing appears to be concentrated within unsubsidized loans with those assigned to the opt-in condition borrowing 8.3 percent less in unsubsidized loans. These changes in borrowing did not induce substitution towards private or Parent PLUS loans nor did they negatively impact enrollment, academic performance, or on-campus work outcomes in the same academic year.
Using individual data from PIAAC and aggregate data on GDP and unemployment for the US, Europe, and Spain, we test how macroeconomic conditions experienced at age eighteen affect the following decisions in post-secondary and tertiary education: i) enrollment ii) dropping-out, iii) type of degree completed, iv) area of specialization, and v) time-to-degree. We also analyze how the effects differ by gender and parental background. Our findings are different for each of these geographies, which shows that the impacts of macroeconomic conditions on higher education decisions depend on context, such as labor markets and education systems. By analyzing various components of higher education together, we are able to obtain a clearer picture of how potential mechanisms linked to lower opportunity costs of education and reduced ability to pay during economic downturns interact to determine student selection.
Occupational credentials provide an additional—and, at times, alternative—path other than traditional academic degrees for individuals to increase productivity and demonstrate their abilities and qualifications to employers. These credentials take the form of licenses and certifications. Although a critical part of the workforce landscape, the literature on the returns to credentials is inadequate, with prior research having limited causal identification, typically relying on OLS regressions which do not sufficiently control for selection. Using questions that identify credential receipt from the 2015 and 2016 Current Population Surveys, we construct an instrumental variable of local peer influence using the within-labor market credential rate of individuals sharing the same sociodemographic characteristics, while controlling for the same group’s average wages and a suite of demographic and geographic controls. We use this instrument in a marginal treatment effects estimator, which allows for estimation of the average treatment effect and determines the direction of selection, and we estimate the effects of credentials on labor market outcomes. We find large, meaningful returns in the form of increased employment, an effect which is concentrated primarily among women. The effect of having a credential on log wages is higher for those in the sub-baccalaureate labor market, suggesting the potential role of occupational credentials as an alternative path to marketable human capital and a signal of skills in the absence of a bachelor’s degree.