Are Community College Transfer Students “a Good Bet” for 4-Year Admissions? Comparing Academic and Labor-Market Outcomes Between Transfer and Native 4-Year College Students

Using detailed administrative data from Virginia, this paper examines whether community college “vertical transfer” students who resemble “native four-year” students in their accumulated college-level credits and performance at their point of entry into the four-year sector perform equally well in terms of both academic and labor market outcomes. We compare matching strategies typically used in existing literature to one where we match vertical transfer and native four-year students based on prior credits earned, accumulative GPA, and the destination four-year institution, and find substantial differences in estimates based on different matching strategies. We also examine potential mechanisms underlying vertical transfer students’ relative performance at the four-year institution and in the labor market. The results show that vertical transfer students’ probability of baccalaureate attainment is comparable to that of similar native students attending the same four-year institution. However, when considering their earnings eight years after initial college enrollment, vertical transfer students experience a significant and nontrivial earnings penalty. Subsequent analyses examining possible mechanisms suggest the earning decrement is partly due to a delayed entry into the labor market as a result of credit loss at the point of transfer.