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Is it worth it? Postsecondary education and labor market outcomes for the disadvantaged

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  • Ben Backes
  • Harry Holzer
  • Erin Velez

Abstract

In this paper we examine a range of postsecondary education and labor market outcomes, with a particular focus on minorities and/or disadvantaged workers. We use administrative data from the state of Florida, where postsecondary student records have been linked to UI earnings data and also to secondary education records. Our main findings can be summarized as follows: 1) Gaps in secondary school achievement can account for a large portion of the variation in postsecondary attainment and labor market outcomes between the disadvantaged and other students, but meaningful gaps also exist within achievement groups, and 2) Earnings of the disadvantaged are hurt by low completion rates in postsecondary programs, poor performance during college, and not choosing high-earning fields. In particular, significant labor market premia can be earned in a variety of more technical certificate and Associate (AA) programs, even for those with weak earlier academic performance, but instead many disadvantaged (and other) students choose general humanities programs at the AA (and even the BA level) with low completion rates and low compensation afterwards. A range of policies and practices might be used to improve student choices as well as their completion rates and earnings. Copyright Backes et al.; licensee Springer. 2015

Suggested Citation

  • Ben Backes & Harry Holzer & Erin Velez, 2015. "Is it worth it? Postsecondary education and labor market outcomes for the disadvantaged," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-30, December.
    • Handle: RePEc:spr:izalpo:v:4:y:2015:i:1:p:1-30:10.1186/s40173-014-0027-0
    DOI: 10.1186/s40173-014-0027-0
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    Cited by:

    1. Holzer, Harry J. & Xu, Zeyu, 2019. "Community College Pathways for Disadvantaged Students," IZA Discussion Papers 12319, Institute of Labor Economics (IZA).
    2. Philip Oreopoulos, 2021. "What Limits College Success? A Review and Further Analysis of Holzer and Baum's Making College Work," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 546-573, June.
    3. Baum, Sandy & Holzer, Harry J. & Luetmer, Grace, 2021. "Should the Federal Government Fund Short-Term Postsecondary Certificate Programs?," IZA Discussion Papers 14109, Institute of Labor Economics (IZA).
    4. Holzer, Harry J., 2021. "After COVID-19: Building a More Coherent and Effective Workforce Development System in the US," IZA Policy Papers 174, Institute of Labor Economics (IZA).
    5. Turner, Lesley J., 2016. "The returns to higher education for marginal students: Evidence from Colorado Welfare recipients," Economics of Education Review, Elsevier, vol. 51(C), pages 169-184.
    6. Cowan, James & Goldhaber, Dan & Holzer, Harry J. & Naito, Natsumi & Xu, Zeyu, 2020. "Career and Technical Education in High School and Postsecondary Career Pathways in Washington State," IZA Discussion Papers 13817, Institute of Labor Economics (IZA).
    7. Shoag, Daniel W. & Strain, Michael R. & Veuger, Stan A., 2021. "How Do Workers Perceive the Risks from Automation and the Opportunities to Retrain? Evidence from a Survey of Truck Drivers," IZA Discussion Papers 14249, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Disadvantaged; Postsecondary; Earnings; Achievement; Completion; Associate Degree; Bachelor's Degree;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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