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First Degree Earns: The Impact of College Quality on College Completion Rates

  • Cohodes, Sarah

    (Harvard University)

  • Goodman, Joshua

    (Harvard University)

We use a Massachusetts merit aid program to provide the first clear causal evidence on the impact of college quality on students' postsecondary enrollment decisions and rates of degree completion, where college quality is defined by a variety of measures including on-time graduation rates. High school students with test scores above multiple thresholds were granted tuition waivers at in-state public colleges of lower quality than the average alternative available to such students. A binding score regression discontinuity design comparing students just above and below these thresholds yields two main findings. First, students are remarkably willing to forego college quality for relatively small amounts of money. Second, choosing a lower quality college significantly lowers on-time completion rates, a result driven by highskilled students who would otherwise have attended higher quality colleges. For the marginal student, enrolling at an in-state public college lowered the probability of graduating on time by more than 40%. The low completion rates of scholarship users imply the program had little impact on the in-state production of college degrees. More broadly, these results suggest that the critically important task of improving college quality requires steps beyond merely changing the composition of the student body.

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Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp12-033.

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Date of creation: Aug 2012
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Handle: RePEc:ecl:harjfk:rwp12-033
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  1. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1491-1527.
  2. Leigh, D. E. & Gill, A. M., 2003. "Do community colleges really divert students from earning bachelor's degrees?," Economics of Education Review, Elsevier, vol. 22(1), pages 23-30, February.
  3. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
  4. Long, Mark C., 2008. "College quality and early adult outcomes," Economics of Education Review, Elsevier, vol. 27(5), pages 588-602, October.
  5. Dominic J. Brewer & Eric Eide & Ronald G. Ehrenberg, 1996. "Does It Pay To Attend An Elite Private College? Cross Cohort Evidence on the Effects of College Quality on Earnings," NBER Working Papers 5613, National Bureau of Economic Research, Inc.
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  7. Belley, Phillippe & Lochner, Lance, 2009. "The Changing Role of Family Income and Ability in Determining Educational Achievement," CLSSRN working papers clsrn_admin-2009-9, Vancouver School of Economics, revised 02 Feb 2009.
  8. Sandy, Jonathan & Gonzalez, Arturo & Hilmer, Michael J., 2006. "Alternative paths to college completion: Effect of attending a 2-year school on the probability of completing a 4-year degree," Economics of Education Review, Elsevier, vol. 25(5), pages 463-471, October.
  9. Dale, Stacy & Krueger, Alan B., 2011. "Estimating the Return to College Selectivity over the Career Using Administrative Earning Data," IZA Discussion Papers 5533, Institute for the Study of Labor (IZA).
  10. Bound, John & Turner, Sarah, 2007. "Cohort crowding: How resources affect collegiate attainment," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 877-899, June.
  11. Kevin Lang & Erez Siniver, 2011. "Why Is an Elite Undergraduate Education Valuable? Evidence from Israel," NBER Working Papers 16730, National Bureau of Economic Research, Inc.
  12. John Bound & Michael F. Lovenheim & Sarah Turner, 2010. "Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 129-57, July.
  13. Calcagno, Juan Carlos & Bailey, Thomas & Jenkins, Davis & Kienzl, Gregory & Leinbach, Timothy, 2008. "Community college student success: What institutional characteristics make a difference?," Economics of Education Review, Elsevier, vol. 27(6), pages 632-645, December.
  14. Kevin Stange, 2012. "Ability Sorting and the Importance of College Quality to Student Achievement: Evidence from Community Colleges," Education Finance and Policy, MIT Press, vol. 7(1), pages 74-105, January.
  15. Martha J. Bailey & Susan M. Dynarski, 2011. "Gains and Gaps: Changing Inequality in U.S. College Entry and Completion," NBER Working Papers 17633, National Bureau of Economic Research, Inc.
  16. Lockwood Reynolds, C., 2012. "Where to attend? Estimating the effects of beginning college at a two-year institution," Economics of Education Review, Elsevier, vol. 31(4), pages 345-362.
  17. Dan A. Black & Jeffrey A. Smith, 2006. "Estimating the Returns to College Quality with Multiple Proxies for Quality," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 701-728, July.
  18. repec:pri:indrel:dsp01gf06g265z is not listed on IDEAS
  19. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20033, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  20. repec:mpr:mprres:6922 is not listed on IDEAS
  21. Rouse, Cecilia Elena, 1995. "Democratization or Diversion? The Effect of Community Colleges on Educational Attainment," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 217-24, April.
  22. Dominic J. Brewer & Eric R. Eide & Ronald G. Ehrenberg, 1999. "Does It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 34(1), pages 104-123.
  23. Loury, Linda Datcher & Garman, David, 1995. "College Selectivity and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 289-308, April.
  24. Papay, John P. & Willett, John B. & Murnane, Richard J., 2011. "Extending the regression-discontinuity approach to multiple assignment variables," Journal of Econometrics, Elsevier, vol. 161(2), pages 203-207, April.
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