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We exploit historical natural experiments to test whether universities increase economic mobility and equality. We use "runner-up’" counties that were strongly considered to become university sites but were not selected for as-good-as-random reasons as counterfactuals for university counties. University establishment causes greater intergenerational income mobility but also increases cross-sectional income inequality. We highlight four findings to explain this seeming paradox: universities hollow out the local labor market and provide greater opportunities to achieve top incomes, both of which increase cross-sectional inequality, and increase educational attainment and connections to high-SES people, which prevent inequality from perpetuating into intergenerational immobility.
Graduate education is among the fastest growing segments of the U.S. higher educational system. This paper provides up-to-date causal evidence on labor market returns to Master’s degrees and examines heterogeneity in the returns by field area, student demographics and initial labor market conditions. We use rich administrative data from Ohio and an individual fixed effects model that compares students’ earnings trajectories before and after earning a Master’s degree. Findings show that obtaining a Master’s degree increased quarterly earnings by about 12% on average, but the returns vary largely across graduate fields. We also find gender and racial disparities in the returns, with higher average returns for women than for men, and for White than for Black graduates. In addition, by comparing returns among students who graduated before and under the Great Recession, we show that economic downturns appear to reduce but not eliminate the positive returns to Master’s degrees.
For decades, pundits, politicians, college administrators, and academics have lamented the dismal rates of civic engagement among students who enroll in courses and eventually major in science, technology, engineering, and mathematics (i.e., STEM) fields. However, the research supporting this conclusion has faced distinct challenges in terms of data quality. Does STEM actually decrease the odds that young people will be actively involved in democracy? This paper assesses the relationship between studying STEM and voting. To do so, we create a dataset of over 23 million students in the U.S. matched to national validated voting records. The novel dataset is the largest known individual-level dataset in the U.S. connecting high school and college students to voting outcomes. It also contains a rich set of demographic and academic variables, to account for many of the common issues related to students' selection into STEM coursework. We consider two measures of STEM participation ---Advanced Placement (AP) Exam taking in high school and college major. Using both measures, we find that, unconditionally, STEM students are slightly more likely to vote than their non-STEM peers. After including the rich set of controls, the sign reverses and STEM students are slightly less likely to vote than their non-STEM peers. However, these estimated relationships between STEM and voting are small in magnitude---about the same effect size as a single get-out-the-vote mailer---and we can rule out even very modest causal effects of marginally more STEM coursework on voting for the typical STEM student. We cannot rule out modest effects for a few subfields. Our analyses demonstrate that, on average, marginally more STEM coursework in high school and college does not contribute to the dismally low participation rates among young people in the U.S.
Performance-based funding models for higher education, which tie state support for institutions to performance on student outcomes, have proliferated in recent decades. Some states have designed these policies to also address educational attainment gaps by including bonus payments for traditionally low-performing groups. Using a Synthetic Control Method research design, we examine the impact of these funding regimes on race-based completion gaps in Tennessee and Ohio. We find no evidence that performance-based funding narrowed race-based completion gaps. In fact, contrary to their intended purpose, we find that performance-based funding widened existing gaps in certificate completion in Tennessee. Across both states, the estimated impacts on associate degree outcomes are also directionally consistent with performance-based funding exacerbating racial inequities in associate degree attainment.
Financing college expenses through an income share agreement (ISA) is an arrangement where the student agrees to pay a fixed percentage of future earned income for a designated period of time in exchange for college funding. Using administrative and survey data for all eligible applicants to a university ISA program, I estimate the adverse selection into the ISA and provide preliminary estimates of the moral hazard for ISA participants. Identification of adverse selection comes from being able to observe the full set of eligible students who apply to the program. There is evidence of selection on the offered income share rate (which is determined by the student’s major) as well as on parent characteristics, though not parent income. Surprisingly, there is no evidence of adverse selection on student ability as measured by SAT score and college grades. I find no differential selection on other student characteristics including demographics and measures of debt aversion, risk aversion, and time preference. Controlling for observable factors, ISA participation increases the likelihood of college graduation by 3 percentage points and decreases starting salary by $5,000 on average.
Beliefs about relative academic performance may shape field specialization and explain gender gaps in STEM enrollment, but little causal evidence exists. To test whether these beliefs are malleable and salient enough to change behavior, I run a randomized controlled trial with 5,700 undergraduates across seven introductory STEM courses. Providing relative performance information shrinks gender gaps in biased beliefs substantially and closes ten percent of the gender gap in subsequent STEM course-taking. The gap closes due to men taking fewer STEM credits; women’s behavior is unchanged, implying that male overconfidence rather than female underconfidence contributes to gaps in specialization. Beliefs matter, but may not be a useful target for facilitating female STEM participation.
This paper examines how the pandemic impacted the enrollment patterns, fields of study, and academic outcomes of students in the California Community College System, the largest higher-education system in the country. Enrollment dropped precipitously during the pandemic – the total number of enrolled students fell by 11 percent from fall 2019 to fall 2020 and by another 7 percent from fall 2020 to fall 2021. The California Community College system lost nearly 300,000 students over this period. Our analysis reveals that enrollment reductions were largest among Black/African-American and Latinx students, and were larger among continuing students than first-time students. We find no evidence that having a large online presence prior to the pandemic protected colleges from these negative effects. Enrollment changes were substantial across a wide range of fields and were large for both vocational courses and academic courses that can be transferred to four-year institutions. In terms of course performance, changes in completion rates, withdrawal rates, and grades primarily occurred in the spring of 2020. These findings of the effects of the pandemic at community colleges have implications for policy, impending budgetary pressures, and future research.
Every year millions of students seeking access to federal financial aid complete the Free Application for Federal Student Aid (FAFSA) application which grants an estimated $234 billion in federal aid in the 2020-21 academic year. Upon receiving students’ FAFSA, the U.S. Department of Education selects some students for income verification, a process in which educational institutions check the accuracy of the information students filled out on the FAFSA. I conducted semi-structured interviews with 17 Latinx community college students to identify barriers in the verification process. Using Critical Race Theory, I contend the verification process reflects and upholds institutional racism within the financial aid process through three barriers. Latinx students experience concern and confusion upon receiving notification of verification selection, difficulty locating requested documentation and acquiring parents’ signature, and undergo a lengthy review of their verification forms which delays receipt of their financial aid.
Despite decades and hundreds of billions of dollars of federal and state investment in policies to promote postsecondary educational attainment as a key lever for increasing the economic mobility of lower-income populations, research continues to show large and meaningful differences in the mid-career earnings of students from families in the bottom and top income quintiles. Prior research has not disentangled whether these disparities are due to differential sorting into colleges and majors, or due to barriers lower socioeconomic status (SES) graduates encounter during the college-to-career transition. Using linked individual-level higher education and Unemployment Insurance (UI) records for nearly a decade of students from the Virginia Community College System (VCCS), we compare the labor market outcomes of higher- and lower-SES community college graduates within the same college, program, and academic performance level. Our analyses show that, conditional on employment, lower-SES graduates earn nearly $500/quarter less than their higher-SES peers one year after graduation, relative to higher-SES graduate average of $10,846/quarter. The magnitude of this disparity persists through at least three years after graduation. Disparities are concentrated among non-Nursing programs, in which gaps persist seven years from graduation. Our results highlight the importance of greater focus on the college-to-career transition.