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The Returns to a Large Community College Program: Evidence from Admissions Lotteries

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  • Michel Grosz

Abstract

This paper estimates the labor market returns to the associate's degree in nursing (ADN), which is one of the most popular community college programs. I use student-level academic and earnings records across two decades for all community college students in California. I leverage random variation from admissions lotteries to produce causal estimates of the effect of the ADN on earnings and employment at a single large ADN program. Enrolling in the program increases earnings by 44 percent and the probability of working in the health care industry by 19 percentage points. These estimates are similar to ones in models that do not use the lottery variation but do control for individual fixed effects and individual-specific linear time trends, which I also estimate in a wider set of institutions where lottery estimates are not possible. In light of concerns about nursing shortages, I estimate that the economic benefit of expanding an ADN program by one seat far outweighs the costs.

Suggested Citation

  • Michel Grosz, 2020. "The Returns to a Large Community College Program: Evidence from Admissions Lotteries," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 226-253, February.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:1:p:226-53
    DOI: 10.1257/pol.20170506
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    1. Stephanie Riegg Cellini & Fernando Ferreira & Jesse Rothstein, 2010. "The Value of School Facility Investments: Evidence from a Dynamic Regression Discontinuity Design," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 215-261.
    2. Alexander Gelber & Adam Isen & Judd B. Kessler, 2016. "The Effects of Youth Employment: Evidence from New York City Lotteries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 423-460.
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    Cited by:

    1. Elisabeth Leduc & Ilan Tojerow, 2025. "Closing the Mismatch: Encouraging Jobseekers to Reskill for Shortage Occupations," Tinbergen Institute Discussion Papers 25-014/V, Tinbergen Institute.
    2. Jepsen, Christopher & Mueser, Peter R. & Troske, Kenneth & Jeon, Kyung-Seong, 2023. "Estimates of Earnings Returns by Field of Study for For-Profit Schools and Community Colleges," IZA Discussion Papers 16568, Institute of Labor Economics (IZA).
    3. Pan, Weixiang, 2025. "Firm-specific pay premia and the returns to higher education: Evidence from community colleges," Labour Economics, Elsevier, vol. 93(C).
    4. Bennett, Patrick & Blundell, Richard & Salvanes, Kjell Gunnar, 2020. "A Second Chance? Labor Market Returns to Adult Education Using School Reforms," Discussion Paper Series in Economics 14/2020, Norwegian School of Economics, Department of Economics.
    5. Lee, Maxine J., 2021. "The effect of import competition on educational attainment at the postsecondary level: Evidence from NAFTA," Economics of Education Review, Elsevier, vol. 82(C).
    6. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
    7. Grosz, Michel, 2024. "Community colleges and careers: Evidence from nursing school lotteries," Labour Economics, Elsevier, vol. 90(C).
    8. Chang Hyung Lee, 2020. "Minimum Wage Policy and Community College Enrollment Patterns," ILR Review, Cornell University, ILR School, vol. 73(1), pages 178-210, January.
    9. Celeste K. Carruthers & Christopher Jepsen, 2020. "Vocational Education: An International Perspective," CESifo Working Paper Series 8718, CESifo.
    10. Juan Esteban Carranza & María Marta Ferreyra & Ana Maria Gazmuri, 2023. "The Dynamic Market for Short-Cycle Higher Education Programs," Borradores de Economia 1265, Banco de la Republica de Colombia.
    11. Leduc, Elisabeth & Tojerow, Ilan, 2025. "Closing the Mismatch: Encouraging Jobseekers to Reskill for Shortage Occupations," IZA Discussion Papers 17731, Institute of Labor Economics (IZA).
    12. Didier Nibbering & Matthijs Oosterveen, 2023. "Instrument-based estimation of full treatment effects with movers," Papers 2306.07018, arXiv.org.
    13. Dinarte-Diaz, Lelys & Ferreyra, Maria Marta & Urzua, Sergio & Bassi, Marina, 2023. "What makes a program good? Evidence from short-cycle higher education programs in five developing countries," World Development, Elsevier, vol. 169(C).
    14. Taylor K. Odle & Lauren C. Russell, 2023. "The Impact of Reverse Transfer Associate Degrees on Education and Labor Market Outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(3), pages 648-676, June.
    15. Andrew Foote & Michel Grosz, 2020. "The Effect of Local Labor Market Downturns on Postsecondary Enrollment and Program Choice," Education Finance and Policy, MIT Press, vol. 15(4), pages 593-622, Fall.
    16. Omar Bamieh & Andrea Cintolesi & Mario Pagliero, 2024. "Estimating the returns to occupational licensing: evidence from regression discontinuities at the bar exam," Temi di discussione (Economic working papers) 1440, Bank of Italy, Economic Research and International Relations Area.
    17. Naven, Matthew & Whalen, Daniel, 2022. "The signaling value of university rankings: Evidence from top 14 law schools," Economics of Education Review, Elsevier, vol. 89(C).
    18. Oded Gurantz & Ryan Sakoda & Sahyak Sarkar, 2021. "How Does the Elimination of State Aid to For-Profit Colleges Affect Enrollment? Evidence from California’s Reforms," Upjohn Working Papers 21-356, W.E. Upjohn Institute for Employment Research.
    19. Beuermann, Diether W. & Bottan, Nicolas L. & Hoffmann, Bridget & Jackson, C. Kirabo & Vera-Cossio, Diego, 2024. "Does education prevent job loss during downturns? Evidence from exogenous school assignments and COVID-19 in Barbados," European Economic Review, Elsevier, vol. 162(C).
    20. Bald, Anthony, 2025. "The Birth of an Occupation: Professional Nursing in the Era of Public Health," SocArXiv s6t5r_v1, Center for Open Science.
    21. Michel Grosz & Michal Kurlaender & Ann Stevens, 2022. "Capacity and Flexibility in Community College CTE Programs: Program Offerings and Student Success," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(1), pages 140-188, February.
    22. Jepsen, Christopher & Mueser, Peter & Troske, Kenneth & Jeon, Kyung-Seong, 2025. "Estimates of earnings returns by field of study for-profit schools and community colleges," Economics of Education Review, Elsevier, vol. 107(C).

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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