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Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources

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  • John Bound
  • Michael Lovenheim
  • Sarah Turner

Abstract

Partly as a consequence of the substantial increase in the college wage premium since 1980, a much higher fraction of high school graduates enter college today than they did a quarter century ago. However, the rise in the fraction of high school graduates attending college has not been met by a proportional increase in the fraction who finish. Comparing two cohorts from the high school classes of 1972 and 1992, we show eight-year college completion rates declined nationally, and this decline is most pronounced amongst men beginning college at less-selective public 4-year schools and amongst students starting at community colleges. We decompose the observed changes in completion rates into the component due to changes in the preparedness of entering students and the component due to collegiate characteristics, including type of institution and resources per student. We find that, while both factors play a role, it is the collegiate characteristics that are more important. A central contribution of this analysis is to show the importance of the supply-side of the higher education in explaining changes in college completion.

Suggested Citation

  • John Bound & Michael Lovenheim & Sarah Turner, 2009. "Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources," NBER Working Papers 15566, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15566
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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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