The Labor Market Returns to a For-Profit College Education
AbstractA lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we offer some of the first causal estimates of the earnings gains to for-profit colleges. We rely on restricted-use data from the 1997 National Longitudinal Survey of Youth (NLSY97) to implement an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students. We find that students who enroll in associate’s degree programs in for-profit colleges experience earnings gains between 6 and 8 percent, although a 95 percent confidence interval suggests a range from -2.7 to 17.6 percent. These gains cannot be shown to be different from those of students in public community colleges. Students who complete associate’s degrees in for-profit institutions earn around 22 percent, or 11 percent per year, and we find some evidence that this figure is higher than the returns experienced by public sector graduates. Our findings suggest that degree completion is an important determinant of for-profit quality and student success.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18343.
Date of creation: Aug 2012
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Note: ED LS
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Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- I20 - Health, Education, and Welfare - - Education - - - General
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-03 (All new papers)
- NEP-EDU-2012-09-03 (Education)
- NEP-LAB-2012-09-03 (Labour Economics)
- NEP-LMA-2012-09-03 (Labor Markets - Supply, Demand, & Wages)
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