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The Labor Market Returns to a For-Profit College Education

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  • Stephanie Riegg Cellini
  • Latika Chaudhary

Abstract

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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  • Stephanie Riegg Cellini & Latika Chaudhary, 2012. "The Labor Market Returns to a For-Profit College Education," NBER Working Papers 18343, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18343
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    References listed on IDEAS

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    Cited by:

    1. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    2. Lang, Kevin & Weinstein, Russell, 2013. "The wage effects of not-for-profit and for-profit certifications: Better data, somewhat different results," Labour Economics, Elsevier, vol. 24(C), pages 230-243.
    3. Cunha, Jesse M. & Miller, Trey, 2014. "Measuring value-added in higher education: Possibilities and limitations in the use of administrative data," Economics of Education Review, Elsevier, vol. 42(C), pages 64-77.
    4. Jepsen, Christopher & Mueser, Peter R. & Jeon, Kyung-Seong, 2016. "The Benefits of Alternatives to Conventional College: Labor-Market Returns to Proprietary Schooling," IZA Discussion Papers 10007, Institute for the Study of Labor (IZA).
    5. A.P. Gorina, 2016. "Issues and Prospectives of the Educational Service Market Modernization," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 227-238.
    6. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2016. "Where Do Students Go when For-Profit Colleges Lose Federal Aid?," NBER Working Papers 22967, National Bureau of Economic Research, Inc.
    7. Gilpin, Gregory A. & Saunders, Joseph & Stoddard, Christiana, 2015. "Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes," Economics of Education Review, Elsevier, vol. 45(C), pages 53-63.
    8. Eric P. Bettinger & Lindsay Fox & Susanna Loeb & Eric S. Taylor, "undated". "Virtual Classrooms: How Online College Courses Affect Student Success," Mathematica Policy Research Reports 8841fb61efb847c4af9da05b0, Mathematica Policy Research.
    9. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael, 2017. "How does for-profit college attendance affect student loans, defaults, and labor market outcomes?," Staff Reports 811, Federal Reserve Bank of New York, revised 01 Apr 2018.
    10. Stephanie Riegg Cellini & Nicholas Turner, 2016. "Gainfully Employed? Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data," NBER Working Papers 22287, National Bureau of Economic Research, Inc.
    11. Darolia, Rajeev, 2013. "Student Loan Repayment and College Accountability," Payment Cards Center Discussion Paper 13-5, Federal Reserve Bank of Philadelphia.
    12. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    13. Andrew Barr, 2015. "From the Battlefield to the Schoolyard: The Short- Term Impact of the Post- 9/11 GI Bill," Journal of Human Resources, University of Wisconsin Press, vol. 50(3), pages 580-613.
    14. Webber, Douglas A., 2017. "Risk-sharing and student loan policy: Consequences for students and institutions," Economics of Education Review, Elsevier, vol. 57(C), pages 1-9.
    15. Turner, Lesley J., 2016. "The returns to higher education for marginal students: Evidence from Colorado Welfare recipients," Economics of Education Review, Elsevier, vol. 51(C), pages 169-184.
    16. Lerman, Robert I., 2013. "Skill Development in Middle Level Occupations: The Role of Apprenticeship Training," IZA Policy Papers 61, Institute for the Study of Labor (IZA).
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    18. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.
    19. Böckerman, Petri & Haapanen, Mika & Jepsen, Christopher, 2015. "Back to School? Labor-Market Returns to Vocational Postsecondary Education," IZA Discussion Papers 9079, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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