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The Labor Market Returns to a For-Profit College Education

  • Stephanie Riegg Cellini
  • Latika Chaudhary

A lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we estimate the earnings gains to for-profit college attendance using restricted-access data from the 1997 National Longitudinal Survey of Youth (NLSY97). Using an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students, we find that students who enroll in associate's degree programs in for-profit colleges experience earnings gains of about 10 percent relative to high school graduates with no college degree, conditional on employment. Since associate's degree students attend for an average of 2.6 years, this translates to a 4 percent return per year of education in a for-profit college, slightly lower than estimates of returns for other sectors found in the literature.

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File URL: http://www.nber.org/papers/w18343.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18343.

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Date of creation: Aug 2012
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Publication status: published as Cellini, Stephanie Riegg and Latika Chaudhary, “The Labor Market Returns to a For-Profit College Education.” Economics of Education Review, December 2014, 43: 125-140.
Handle: RePEc:nbr:nberwo:18343
Note: ED LS
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  1. Christopher Jepsen & Kenneth Troske & Paul Coomes, 2012. "The labor-market returns to community college degrees, diplomas and certificates," Working Papers 201221 Classification-JEL, Geary Institute, University College Dublin.
  2. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 2000. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," NBER Working Papers 7457, National Bureau of Economic Research, Inc.
  3. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
  4. Monk-Turner, Elizabeth, 1994. "Economic returns to community and four-year college education," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 23(4), pages 441-447.
  5. Stephanie Riegg Cellini, 2009. "Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 1-30, August.
  6. Richard B. Freeman, 1983. "Longitudinal Analyses of the Effects of Trade Unions," NBER Working Papers 1207, National Bureau of Economic Research, Inc.
  7. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  8. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  9. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
  10. Thomas J. Kane & Cecilia Elena Rouse, 1999. "The Community College: Educating Students at the Margin between College and Work," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 63-84, Winter.
  11. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  12. Angrist, Joshua D & Newey, Whitney K, 1991. "Over-Identification Tests in Earnings Functions with Fixed Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 317-23, July.
  13. Deming, David J. & Goldin, Claudia D. & Katz, Lawrence F., 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Scholarly Articles 8642952, Harvard University Department of Economics.
  14. W. Norton Grubb, 1993. "The Varied Economic Returns to Postsecondary Education: New Evidence from the Class of 1972," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 365-382.
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