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The Returns to Elite College Education: A Quasi-Experimental Analysis

Author

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  • Massimo Anelli

Abstract

I take advantage of a sharp discontinuity in the probability of admission to an elite university at the admission score threshold, to estimate causal returns to college education quality. I use a newly constructed dataset, which combines individual administrative records about high school, college admission, college attendance and tax returns. Students with score just above the admission threshold have 52% higher yearly income with respect to just-below-threshold students. This premium is equivalent to a jump from the 44th percentile to the 74th percentile of the income distribution. The richness of the data allows me to explore the counterfactual college career of not admitted students and the potential mechanisms underlying the estimated income premium. I find that students with a just-above-threshold score are less likely to be college dropouts, take six fewer months to graduate, choose different majors and are more likely to have income in the top quartile of the distribution. Cumulated over fifteen years, the time span of income data for my sample, the net premium of attending the elite university amounts to around $120,000.

Suggested Citation

  • Massimo Anelli, 2016. "The Returns to Elite College Education: A Quasi-Experimental Analysis," CESifo Working Paper Series 6076, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6076
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    File URL: https://www.cesifo-group.de/DocDL/cesifo1_wp6076.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2016. "Recruiting and Supporting Low-Income, High-Achieving Students at Flagship Universities," NBER Working Papers 22260, National Bureau of Economic Research, Inc.
    2. Ben Ost & Weixiang Pan & Douglas Webber, 2018. "The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies," Journal of Labor Economics, University of Chicago Press, vol. 36(3), pages 779-805.

    More about this item

    Keywords

    education quality; returns to education; human capital;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • 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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