Search

This study investigates how exposure to a field of study influences students’ major choices. If students have incomplete information, exposure potentially helps them to learn about the scope of a field as well as how well the field matches their interest and abilities. We exploit a natural experiment where university students have to write a research paper in business, economics, or law during their first year before they choose a major. Due to oversubscription of business papers, the field of the paper is assigned quasi-randomly. We find that writing in economics raises the probability of majoring in economics by 2.7 percentage points. We show further that this effect varies across subfields: the effect is driven by assignment to topics less typical of the public's perception of the field of economics, suggesting students learn through exposure that the field is broader than they thought. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of a reform which replaced universal basic grants by income-contingent loans on enrolment in Dutch higher education using administrative data of ten complete student cohorts. Estimates of differences between cohorts show no negative effect of the policy on enrolment. Moreover, difference-in-differences estimates exploiting variation in eligibility for supplementary grants show no negative effect on enrolment. These findings suggest that a system of income-contingent loans can facilitate an increase of private contributions without harming access to higher education. [ABSTRACT FROM AUTHOR]

The use of income contingent loans (ICLs) for Higher Education (HE) students is becoming increasingly prevalent around the world. Using a model of simulated lifetime earnings for graduates, in this paper we show that the impact of the design of ICLs on the magnitude and distribution of government subsidies is highly dependent on the institutional setting. In particular, the average debt level as a share of average earnings is a key determinant of the impact of various policy parameters. The variance of earnings within the graduate population is also shown to be a determinant of ICL taxpayer costs. This paper is the first comparative exercise of impact of the design of ICLs in different settings, and the findings are highly relevant to countries looking to implement or reform their student loan systems. [ABSTRACT FROM AUTHOR]

This paper explains why under laissez-faire the financing of higher education is both inefficient and inequitable. It is argued that a government-run scheme of income contingent loans (ICLs) for higher education would achieve superior outcomes. We advocate a refinement of existing ICLs schemes. Following Apps, Long and Rees (2014), the paper proposes a piecewise-linear repayment schedule that serves both equity and efficiency objectives. [ABSTRACT FROM AUTHOR]

This paper estimates the impact of accountability scores on Brazilian higher education. We implement a regression discontinuity design to explore a natural experiment resulting from the federal rules for assigning quality levels to undergraduate programs. We test whether program quality is sensitive to negative reinforcement, such as punishments imposed when a minimum threshold is not attained. The findings indicate that program administrators exhibit a positive response to the prospect of punishment by enhancing program quality in the subsequent evaluation cycle. The primary drivers of this advancement – infrastructure, teaching and learning evaluations, faculty dedication, and the proportion of faculty with a Ph.D. degree – are largely under the administrators' direct control. However, quality indicators less subject to administrative manipulation, such as student performance and value-added measures, exhibit minimal change. [ABSTRACT FROM AUTHOR]

Whereas there is a large literature evaluating the impacts of education, most of the focus has been on getting to universal primary enrollment and understanding the returns to basic education; but it misses the major shifts toward higher education in many fast-growing parts of the developing world over the last 20 years. In this paper, I study the returns to higher education in China using the reinstatement of the National College Entrance Examination in 1977 as a natural experiment, investigating the causal impacts of higher education on later life outcomes and well-being. Through a combination of regression discontinuity and difference-in-difference methods, I find that cohorts that were more likely to complete high school and obtain a college education as a result of the reform were no more likely to be employed, but were more likely to have a high-socioeconomic (SES) occupation in their early 30s, and lesser of the same in their 40s. Cohorts with higher education work for fewer days in a week, and, on average, earn a higher monthly income by 56 percent in their late 40s. [ABSTRACT FROM AUTHOR]

• First theoretical and empirical discussion of how ability and job prospects affect effort. • Intriguing finding showing a lean-back effect in study behavior of talented individuals. • Contrariwise, employment prospects motivate students as theoretically predicted. • Official unemployment data allows for IV approach based on exogenous variations in outlook. • Theoretical modelling provides interpretation of empirical finding in conflict with prediction. This paper examines the decision-making process of students from an economic perspective to understand the determinants of an individual's willingness to provide effort. Our theoretical model predicts that ability and job market prospects are positive determinants. Analyzing a novel dataset on thousands of German students, however, we instead find that ability has a significantly negative effect on effort. It seems that the marginal gain of increasing effort in terms of higher expected income after studying is lower for high-ability students compared to low-ability students. In regard to the second determinant, the evidence rejects a similar argument, according to which great job market prospects may impair student effort. Applying an instrumental variable approach based on official unemployment data on regional labor markets, we can confirm our prediction on the positive role of perceived employment prospects in actual student behavior. [ABSTRACT FROM AUTHOR]

The Japanese higher education sector has seen increases in tuition with stagnant household incomes in a society where family support for university students has been the norm. Student loans from the government have grown rapidly to sustain the gradual increase in university enrolments. These time-based repayment loans (TBRLs) have created financial hardship for increasing numbers of loan recipients and their families. There is some evidence that prospective students from low-income households are forgoing a university education to avoid student loan debt. The Japanese government has introduced some measures including grants and a partial income-contingent loan (ICL) scheme to help alleviate these problems. While the ICL scheme is a positive development, this paper shows that it requires further refinement and broader coverage if it is to adequately address the challenges facing higher education financing in Japan. We show that an affordable and universal ICL system could be introduced in Japan that avoids problems with the current partial income-contingent loan scheme and would help alleviate access issues for those from disadvantaged backgrounds. Importantly, the unique features of the Japanese labor market have to be carefully considered, especially the large gender wage gap for married women. By introducing dynamics into modeling graduate earnings and using carefully selected parameters, we show that it is possible to have a universal ICL which achieves a balance between access and affordable repayment with minimal long-run costs to taxpayers. [ABSTRACT FROM AUTHOR]

This paper examines the feasibility of various alternative student loan schemes for Ireland. Using data from a large employer survey, we model the life-cycle earnings distribution for Irish graduates. We then use these estimates to simulate the effects of alternative types of student loans, including mortgage-type loans and income-contingent loans of various designs, incorporating participation and migration patterns into the simulations. The results show that mortgage-type loans entail unsustainably high repayment rates for low income graduates. Through the specification of several alternative income-contingent loan schemes, it is demonstrated that this approach to higher education financing is feasible both in terms of affordability for graduates and with respect to implied government subsidies. There are some important policy design issues to be addressed and we conclude with some recommendations for a future Irish scheme. [ABSTRACT FROM AUTHOR]

Despite increasing financial pressures on higher education systems throughout the world, many governments remain resolutely opposed to the introduction of tuition fees, and some countries and states where tuition fees have been long established are now reconsidering free higher education. This paper examines the consequences of charging tuition fees on university enrolments, equity, and proxies for institutional quality. To do so, we study the English higher education system which has, in just two decades, moved from a free college system to one in which tuition fees are among the highest in the world. Our findings suggest that England's shift has resulted in increased funding per head and rising enrolments, with no apparent widening of the participation gap between advantaged and disadvantaged students. The role of fees is moderated by other key features of higher education finance which may differ across countries: in contrast to other systems with high tuition fees, the English system is distinct in that its income-contingent loan system ensures that no tuition fees are paid upfront, and provides students with comparatively generous assistance for living expenses. Still, the English experience provides an instructive case for other countries considering implementing or abolishing tuition fees. [ABSTRACT FROM AUTHOR]

Abstract This paper examines the impact of introducing a Research Evaluation Exercise (REE) on Italian undergraduate students' enrolment choices. We investigate whether subject groups in higher education institutions (HEIs) that performed better in the REE also benefited from more student enrolments and the enrolment of students with better entry qualifications. To this aim, we use a before-after estimator that exploits differential treatment intensities across HEIs and subject groups. Our analysis demonstrates that the REE had a positive effect on student enrolment, but only in the top-performing HEIs. The effect was larger for high-quality students, namely those with better high school final marks or coming from the academic track. Further exploratory analysis suggests that there was a reversal in the effect with the second REE, with only medium- or bottom-performing HEIs gaining more enrolments as a result of improving their performance. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of student loans on students' (financial) behavior. For causal identification, we exploit quasi-experimental evidence using a nudge in the take-up of student loans in higher education in the Netherlands. We estimate an instrumental variable (IV) model with a first-stage Difference-in-Differences design. We find that a decline in the default student loan reduced monthly student borrowing by 141 euros. A one-euro decline in student loans reduced students' expenditures by 61 cents, but also led to a substantial increase of parental financial contributions (43 cents). Especially expenditures on leisure activities were affected. There is no evidence for increased labor earnings among students, on average. Self-reported indicators of academic performance do not worsen in response to the reform; students' GPA even improves. [ABSTRACT FROM AUTHOR]

This paper investigates the long-term impact on earnings of attending a tuition-free, top-quality university in Brazil. We identify the causal effect through a sharp discontinuity in an admission process based on test scores. If admitted, low-income students are found to increase their earnings by 26% ten years later. However, admission has a small and insignificant effect on high-income students. The difference between income groups is not explained by educational attainment, program choice, or selection into better-paying jobs. The evidence suggests that most low-income applicants, if not admitted, still graduate from college but with much lower returns to education. High-income applicants who just miss the cutoff, however, can find other opportunities such that earnings trajectories are unchanged. Our results underscore the role of affordable higher education in promoting social mobility. [ABSTRACT FROM AUTHOR]

This paper uses data from the central admission system for Danish post-secondary education merged with other administrative data. Applicants for admission may rank up to eight educational programmes, and I focus on first-time applicants whose first-choice are bachelor's degree university programmes with restricted admission, i.e. with an admission threshold defined in terms of the grade point average obtained from upper secondary school. Using threshold crossing as an instrument for admission in a regression discontinuity design, I find that being admitted to the first-choice programme increases the probability of completing a master's degree in that subject by about 20 percentage points. There is no clear evidence that being admitted to one of the higher degree programmes listed on the application has an effect on years of education or the probability of completing a master's degree (although point estimates indicate small positive effects). There is no robust statistically significant effect on earnings 11 years after application. [ABSTRACT FROM AUTHOR]

• We examine the implications of college admissions criteria on students' outcomes. • Examine admissions at a large university with two admission tracks. • Regular admission track is based exclusively on academic performance while discretionary track considers non-academic qualities. • Discretionary admission students enjoy significantly higher earnings compared to marginal group of regular admission students. • Earnings advantage persists up to three years after graduation. This paper examines the implications of college admissions criteria on students' academic and non-academic performance in university and their labor market outcomes. We exploit a unique feature of the admissions system at a large university in Singapore, the National University of Singapore, that has two admission tracks – a regular admission track where admission is based exclusively on academic performance and a discretionary admission (DA) track where applicants can instead gain admission on the basis of demonstrated non-academic qualities. Comparing students admitted through each track, we find that DA students fare similarly in terms of academic performance in university as marginal students admitted through the regular route. However, they are significantly more likely to be involved in optional academic and non-academic college activities and earn substantially higher labor market earnings up to three years after graduation. These results are not driven by the DA process differentially selecting students on the basis of family background or unobserved academic ability. [ABSTRACT FROM AUTHOR]

Many students who enter college are insufficiently prepared to follow a demanding college-level curriculum. Thus, higher education institutions often require low-performing students to repeat failed courses, a full term, or even a full year. This paper is the first to investigate the effects of such a “(grade) retention” policy on student performance in higher education. We study a setting where first-year undergraduates who fall short of a pre-defined performance requirement have to repeat all first-year courses before they can proceed to the second year. To determine the causal effect of retention and repetition on student performance, we apply a sharp regression discontinuity design to administrative data from a Swiss university. Based on a sample of 5000 students, we find that grade retention increases dropout probabilities after the first year by about 10 percentage points. Repetition of a full year persistently boosts grade point averages by about 0.5 standard deviations, but does not affect study pace and major choices. [ABSTRACT FROM AUTHOR]

This paper presents a large-scale field experiment assessing the impact of an intervention providing evidence-based information about costs and returns to higher education. Treatment impacts are evaluated through university enrolment, choice of field of study, and performance either at university or in the labour market. Thanks to the large sample size, treatment effects can also be assessed for subgroups (by gender and parental education). We find that treated females from high-educated families chose more economically rewarding fields of study, while treated males from low-educated families were more likely to enter the labour market. Although not necessarily in line with policy goals, choices induced by additional information were not detrimental to students' opportunities, as treated students displayed a similar academic performance and higher employment rates. [ABSTRACT FROM AUTHOR]

In their recent paper “(Un)informed College and Major Choice: Evidence from Linked Survey and Administrative Data,” Hastings, Neilson, Ramirez, & Zimmerman (2016) provide an informal costly-information model, linking family background to students’ beliefs about educational costs and benefits. They verify predictions of their model using a data set of beliefs about college institutions and majors among Chilean college applicants and students. I test some of those same predictions using a data set of beliefs about college institutions and different levels of college education among high school students in the United States. I verify their predictions, with some exceptions, supporting the use of their costly-search model. [ABSTRACT FROM AUTHOR]

Using student evaluations of their instructor as an outcome measure, we estimate and compare class size and teacher effects for higher education, with an emphasis on determining whether a comprehensive class size reduction policy that draws on the hiring of new teachers is likely to improve educational outcomes. We find that first time teachers perform significantly worse than their peers, and we find substantial class size effects. Hence higher education institutions face a tradeoff if they wish to increase admission. This tradeoff implies that as class size increases, at first the negative class size effect is smaller than that of introducing a first time teacher. However, beyond a certain level, the class size effect dominates and it is better to create a new class with a first time teacher. 1 1 We would like to thank Matías Covarrubias and Fernanda Rojas for excellent research assistance. We would also like to thank comments received in the internal workshop of Pontificia Universidad Católica de Chile’s Economics Department and in the 2011 Yearly Congress of the Economics Society of Chile. We also thank two anonymous referees whose advice greatly improved the paper. The usual disclaimer applies. [ABSTRACT FROM AUTHOR]

• We estimate the impact of a learning community on first-year college retention at a four-year public research university using a randomized control trial. • Intent-to-treat and local-average-treatment-effect estimates reveal no discernable programmatic effects. • Observational approaches find impacts that are positive, large and statistically significant. • Decomposing the observational estimates reveal that non-random selection into the experimental sample accounts for the major difference in the two estimates. • This exercise cautions against generalizing the RCT result for populations outside the experiment. In this paper, we estimate the impact of a learning community on first-year college retention at a four-year public research university using a randomized control trial (RCT) for those students who opt into the experiment. Intent-to-treat and local-average-treatment-effect estimates reveal no discernable programmatic effects. We also generate estimates of program impact using observational techniques and find estimated impacts that are positive, large and statistically significant. We explore a variety of selection processes to better understand the differences between the RCT and observational estimates and to reflect on the generalizability of the RCT results for various other populations of interest. Non-random selection into the experimental sample accounts for the major difference in the two estimates and also cautions against generalizing the RCT result for populations outside the experiment. [ABSTRACT FROM AUTHOR]

In the face of shrinking government budgets and a growing need to train a high-skilled labor force, policymakers have become increasingly interested in cost-effective measures that induce more students to apply to and enroll in college. In this paper, we use a regression discontinuity design to identify the causal effect of students receiving information about their own college-readiness after taking the ACT on their subsequent college enrollment decisions. Using data from Colorado, where all high school students are required to take the ACT, we find that students who receive information that they are college-ready are no more likely to attend college than those that do not receive this information. We discuss possible reasons for these findings. [ABSTRACT FROM AUTHOR]

The female advantage in college enrollment and completion has generated concern among university officials and sparked debate about gender-conscious college admissions. There are a number of explanations for this increasing gender imbalance on college campuses. This paper focuses on the role played by admissions policies that base decisions solely on applicants’ high school grades. Given that females earn higher grades than males, such policies can contribute to growing female shares in admissions. To exemplify this trend, I use publicly-available data from Texas to show that the Texas Top 10% plan, which guarantees public university admission to students who graduate in the top decile of their high school class, led to an increase in the female share of accepted students. The increase was particularly large among black students, where the female share of admitted students was already highest among the major racial/ethnic groups. [ABSTRACT FROM AUTHOR]

This paper examines the relative labor market gains for first-time college students who entered the North Carolina Community College System in 2002–2003. We compare the returns to diplomas, certificates, and degrees to the returns to some college credits. The authors also investigate the returns to subject field, transfer, and the early trajectories of wages. The analysis is based on student-level administrative records from college transcripts, Unemployment Insurance wage data, and the National Student Clearinghouse data across 830,000 students between 2001 and 2010. Findings from this study confirm those from earlier work: The returns to certificates and diplomas were weak, but associate and bachelor's degrees yielded very strong returns; even small accumulations of credits had labor market value; and the health sector credentials had extremely high returns. Returns were higher for female than for male students. Despite the Great Recession, the returns to college remain strong over the late 2000s. [ABSTRACT FROM AUTHOR]

Community colleges play a major role in postsecondary education, yet previous research has emphasized the impact of merit aid on four-year students rather than two-year students. Furthermore, researchers have focused on the impact of merit aid on enrollment and outcomes during college, but to my knowledge, none have yet considered the impact of aid on earnings after college. This paper utilizes discontinuities in eligibility criteria for a large merit scholarship to examine the local impact of aid on student outcomes both during college and after college. The findings suggest that reducing the cost of community college does not impact persistence, academic performance, degree completion, expected earnings, or short-term earnings after college for marginally eligible students. [ABSTRACT FROM AUTHOR]

This paper develops a general methodology for measuring the value added of institutions of higher education using commonly available administrative data. Our approach recognizes the data limitations and selection problems inherent in higher education, and highlights the challenges these issues pose for education policy. Combining information from different administrative sources in the state of Texas, we follow the universe of Texas college applicants from the time of application (pre-enrollment) through public college and into the labor market. In specifications that do not control for selection, we find large, significant differences across colleges in terms of persistence, graduation, and earnings; however, these differences decrease substantially when we control for selection. In light of the growing interest in using value-added measures in higher education for both funding and incentivizing purposes, our methodology offers unique evidence and lessons for policy makers. [ABSTRACT FROM AUTHOR]

This paper uses variation in the timing of parental layoff to identify the effect of parental job loss on higher education enrollment. Unlike research that compares laid-off workers to workers who do not lose their jobs, all families in our analysis experience a layoff at some point. The treatment group (layoff when child is 15–17) and control group (layoff when child is 21–23) have statistically indistinguishable initial characteristics, but substantially different higher education enrollment rates. We find that parental job loss between ages 15 and 17 decreases college enrollment by 10 percentage points. [ABSTRACT FROM AUTHOR]

This paper shows that a competitive labor market fails to provide first-best incentives to invest in general human capital and this has distributive consequences: college students and firms underinvest in human capital, and this is more pronounced for high-skill students with low-income parents. Long-term contracts, together with privately provided wage-contingent loans, cannot restore efficiency and eliminate the distributive consequences of this labor market failure. Government student loans together with firm subsidies to human capital investments fully solve the market failure. [ABSTRACT FROM AUTHOR]

This paper investigates pecuniary and non-pecuniary returns to college education for academically marginal students in South Korea. The Korean government limits the number of admission slots at each college by assigning a quota for each year, and the quota is binding. An increase in the quota allows more academically marginal students to enter college. The IV estimation using differences in the ratio of 4-year college quotas to cohort size across regions and cohorts shows that 4-year college attendance of marginal students increases hourly wages by 60.3%-75.5%. College education also increases fringe benefits, life, and job satisfaction. [ABSTRACT FROM AUTHOR]

This paper studies spillovers from older to younger siblings in higher education choices. Exploiting discontinuous admission rules generated by Chile's centralized admission system to higher education, we identify strong sibling spillovers in the choice of college. Having an older sibling enroll in a given college increases by 42% the probability of enrolling in that institution. In contrast, we find no effect on major choices. We show evidence suggesting that sibling spillovers in college choice are mainly driven by siblings deriving benefits from attending college together. [ABSTRACT FROM AUTHOR]

This paper examines the impact of higher education on women's fertility decisions. To address the endogeneity of non-compulsory education participation, I focus on an increase in the supply of higher education and a concurrent schooling reform that jointly expanded higher education opportunities in Greece in year 2000. Drawing data from the 10% sample of the 2011 Population Census, I use the exogenous variation introduced by the first grade enrollment age cutoff to apply a Regression Discontinuity Design comparing educational attainment and fertility for women that were just, and just not exposed to the reforms. The probability of giving birth before age 30 decreases by around 20 percentage points for women who completed higher education because they were exposed to the reforms. Career outcomes for employed women with higher education improve, while fertility decreases at ages following graduation, suggesting that the result is primarily driven by the increasing opportunity cost of children. [ABSTRACT FROM AUTHOR]

• We examine effects of the 1970s and 1980s energy boom and bust on college majors. • We focus on petroleum engineering and geology as energy industry related majors. • The energy boom increased the prevalence of energy-related majors. • The energy bust lowered the prevalence of energy-related majors. • Effects are particularly strong for young people born in energy intensive states. This paper examines how college students in the United States altered their college majors during the energy boom and bust of the 1970s and 1980s. We focus on petroleum engineering and geology, two majors closely related to the energy industry. We find strong evidence that the energy boom increased the prevalence of these two energy-related majors and the energy bust lowered the prevalence of these majors. Effects are particularly strong for young people born in energy intensive states. Thus, college major decisions responded to industry fluctuations with important location-specific effects consistent with frictions to migration and information flows. [ABSTRACT FROM AUTHOR]

This paper uses a regression discontinuity approach to estimate the causal effect of a governor's party affiliation on higher education in the U.S. The findings indicate that when a Democrat wins a close race for governor, there is an increase in state revenues appropriated to associate's-degree-granting colleges. There is also some evidence that minority-serving institutions receive additional state funds when a Democratic governor is elected. There is little evidence, however, that state partisanship affects other types of outcomes (e.g. enrollment). [ABSTRACT FROM AUTHOR]

• Performance in lower secondary education are higher for migrants who arrive younger ages than their siblings arriving at older ages. • The age at migration effect is larger for those origin from countries with low net enrolment in education. • The difference in the age at migration effect is largest in mathematics. • In language intensive subjects, the impact of age at migration is substantial for all migrants. This paper studies the effect of migration age on school performance. We exploit that siblings have different migration age, but share the same family background to identify the effect of migration age on educational attainment in lower secondary education in Norway. We estimate a separate effect for migrants from countries with low access to a high quality school system. We find negative effects of migration age on exam results, and larger effects for migrants from countries with low school access. Language intensive subjects are substantially affected for all migrants, while there are differences according to school access for mathematics performance. [ABSTRACT FROM AUTHOR]

Within the education sector, accountability regulations have been used with the intended purpose of improving student outcomes. In higher education, one such regulation aims to improve the ability of borrowers to repay their student loans by placing sanctions on institutions with excessive student loan defaults. This paper examines whether student loan accountability regulations were able to (1) lower student loan defaults, and (2) address the broader objective of improving repayment ability, by exploiting a change to the period in which the regulation's performance measure was monitored. I find that the change to the regulation resulted in less student loan defaults at for-profit colleges. I also find that this reduction in student loan defaults resulted in a short-term improvement in repayment ability at for-profit, but not nonprofit, institutions. [ABSTRACT FROM AUTHOR]

• This paper documents the level of selection bias in the college scorecard earnings metrics. • More than 70% of the between-school variation in median earnings is explained by observable factors. • Controlling for major composition explains 20–30% of the variation in earnings over and above institutional selectivity and student composition. • Consumers can draw misleading conclusions about institutional quality when using publicly available earnings data to compare institutions. Policymakers are increasingly including early-career earnings data in consumer-facing college search tools to help students and families make more informed postsecondary education decisions. We offer new evidence on the degree to which existing college-specific earnings data equip consumers with useful information by documenting the level of selection bias in the earnings metrics reported in the U.S. Department of Education's College Scorecard. Given growing interest in reporting earnings by college and major, we focus on the degree to which earnings differences across four-year colleges and universities can be explained by differences in major composition across institutions. We estimate that more than 70% of the variation in median earnings across institutions is explained by observable factors, and accounting for differences in major composition explains 20–30% of the variation in earnings over and above institutional selectivity and student composition. We also identify large variations in the distribution of earnings within colleges; as a result, comparisons of early-career earnings can be extremely sensitive to whether the median, 25th, or 75th percentiles are presented. Taken together, our findings indicate that consumers can easily draw misleading conclusions about institutional quality when using publicly available earnings data to compare institutions. [ABSTRACT FROM AUTHOR]