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The Benefits of Alternatives to Conventional College: Comparing the Labor-Market Returns to For-Profit Schools and Community Colleges

Author

Listed:
  • Christopher Jepsen
  • Peter Mueser
  • Kenneth Troske
  • Kyung-Seong Jeon

Abstract

This paper provides novel evidence on the labor-market returns to for-profit postsecondary school and community college attendance using a two-step model to avoid recent concerns with singlestage fixed effects methods. Specifically, we link administrative records on for-profit school and community college attendance with quarterly earnings data for over 400,000 students in one state. Five years after enrollment, quarterly earnings conditional on employment exceed earnings in the absence of schooling by 20-29 percent for students attending for-profit schools and 16-27 percent for students attending community colleges. Despite differences in costs, in aggregate the benefits of attendance generally exceed the costs in both for-profit schools and community colleges. Finally, we present evidence showing that students in for-profit schools and community colleges pursue different degrees and focus on different areas of study.

Suggested Citation

  • Christopher Jepsen & Peter Mueser & Kenneth Troske & Kyung-Seong Jeon, 2021. "The Benefits of Alternatives to Conventional College: Comparing the Labor-Market Returns to For-Profit Schools and Community Colleges," CESifo Working Paper Series 9272, CESifo.
    • Handle: RePEc:ces:ceswps:_9272
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    References listed on IDEAS

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    2. Gregory Gilpin & Christina Stoddard, 2017. "Does Regulating For‐Profit Colleges Improve Educational Outcomes? Response To Cellini And Koedel," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(4), pages 953-956, September.
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    5. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    6. Stephanie Riegg Cellini & Cory Koedel, 2017. "The Case For Limiting Federal Student Aid To For‐Profit Colleges," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(4), pages 934-942, September.
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    More about this item

    Keywords

    postsecondary education; labor-market returns; for-profit schools;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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