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Isolating the Causal Impact of Community College Enrollment on Educational Attainment and Labor Market Outcomes in Texas

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  • Darwin Miller

    (Department of Economics, Stanford University)

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    Abstract

    In this paper, we attempt to isolate the causal impact of enrolling in a community college upon educational attainment and labor market outcomes in the state of Texas. Using administrative data on all public high school graduates from the state, we use both matching and IV methods to investigate the impact of community college enrollment on the probability of obtaining a bachelor’s degree. Both methods indicate that enrolling in a community college over a university decreases the probability of completing a bachelor’s degree by approximately 26%. Using data from the Texas Workforce Commission, we go on to look at the labor market return to initial college choice. Using IV to deal with the selection issue, we find that initiating one’s academic career in a community college instead of a university lowers one’s earnings by approximately $6800 per annum for young adults just completing college. After conditioning upon completion of a baccalaureate degree, this estimate falls substantially, and becomes statistically indistinguishable from zero for one of three favored specifications. Our results are quite sensitive to the exclusion of relevant information about the local labor market, which casts doubt upon the results of some past studies using distance IVs to look at labor market outcomes.

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    Bibliographic Info

    Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 06-033.

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    Date of creation: Jan 2007
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    Handle: RePEc:sip:dpaper:06-033

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    Related research

    Keywords: community college; Texas; bachelor's degree; graduation; salary;

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    1. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    2. Grubb, W. Norton, 2002. "Learning and earning in the middle, part I: national studies of pre-baccalaureate education," Economics of Education Review, Elsevier, vol. 21(4), pages 299-321, August.
    3. Molitor, Christopher J. & Leigh, Duane E., 2005. "In-school work experience and the returns to two-year and four-year colleges," Economics of Education Review, Elsevier, vol. 24(4), pages 459-468, August.
    4. Hanushek, Eric A & Rivkin, Steven G & Taylor, Lori L, 1996. "Aggregation and the Estimated Effects of School Resources," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 611-27, November.
    5. Henry S. Farber & Jeffrey R. Kling & Alan Krueger, 1999. "Interpreting Instrumental Variables Estimates of the Returns to Schooling," Working Papers 794, Princeton University, Department of Economics, Industrial Relations Section..
    6. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
    7. Christopher Avery & Caroline M. Hoxby, 2003. "Do and Should Financial Aid Packages Affect Students' College Choices?," NBER Working Papers 9482, National Bureau of Economic Research, Inc.
    8. Stacy Berg Dale & Alan B. Krueger, 1999. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," NBER Working Papers 7322, National Bureau of Economic Research, Inc.
    9. Caroline M. Hoxby, 2004. "College Choices: The Economics of Where to Go, When to Go, and How to Pay For It," NBER Books, National Bureau of Economic Research, Inc, number hoxb04-1.
    10. Audrey Light & Wayne Strayer, 2004. "Who Receives the College Wage Premium?: Assessing the Labor Market Returns to Degrees and College Transfer Patterns," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
    11. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
    12. Thomas J. Kane & Cecilia Elena Rouse, 1999. "The Community College: Educating Students at the Margin between College and Work," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 63-84, Winter.
    13. Rouse, Cecilia Elena, 1995. "Democratization or Diversion? The Effect of Community Colleges on Educational Attainment," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 217-24, April.
    14. Cecilia Elena Rouse, 1998. "Do two-year colleges increase overall educational attainment? Evidence from the states," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 17(4), pages 595-620.
    15. W. Norton Grubb, 1993. "The Varied Economic Returns to Postsecondary Education: New Evidence from the Class of 1972," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 365-382.
    16. Belman, Dale & Heywood, John S, 1997. "Sheepskin Effects by Cohort: Implications of Job Matching in a Signaling Model," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 623-37, October.
    17. Andrew M. Gill & Duane E. Leigh, 2000. "Community college enrollment, college major, and the gender wage gap," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(1), pages 163-181, October.
    18. Duane E. Leigh & Andrew M. Gill, 1997. "Labor Market Returns to Community Colleges: Evidence for Returning Adults," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 334-353.
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