Increasing Returns to Education and Progress towards a College Degree
AbstractReturns to college have increased, but graduation rates have changed relatively little. Modifying a human capital model of college enrollment to endogenize time-to-graduation, we predict that higher returns to education will both speed graduation and increase enrollment. Some of those new entrants may, however, take longer to graduate. Using the 1989 and 1995 Beginning Postsecondary Studies, we employ a multinomial logit to model the association between individual and family characteristics, and five-year college outcomes: graduation, continued enrollment, and non-enrollment. Between cohort differences arise either because the characteristics of those entering college are different or because the relations between characteristics and outcomes have changed. We utilize a Oaxaca-Blinder style decomposition to distinguish between these two alternatives, attributing differences in characteristics to newly attracted students and differences in the relations between characteristics and outcomes to historically attracted students behaving differently. It is changes in behavior that explain the increased progress we observe.
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Bibliographic InfoPaper provided by VCU School of Business, Department of Economics in its series Working Papers with number 0805.
Length: 32 pages
Date of creation: Aug 2008
Date of revision:
Higher Education; Graduation Rates; Persistence;
Find related papers by JEL classification:
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-EDU-2008-09-20 (Education)
- NEP-HRM-2008-09-20 (Human Capital & Human Resource Management)
- NEP-LAB-2008-09-20 (Labour Economics)
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