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The Choice of For-Profit College

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  • Chung, Anna

Abstract

In this paper I investigate whether students self-select into the US for-profit colleges or whether the choice of for-profit sector is accidental or due to the reasons external to the students (geographic exposure to for-profit providers, tuition pricing, or random circumstances). The main student-level data samples come from the National Education Longitudinal Study of 1988 (NELS:88) and the associated Postsecondary Education Transcript Study (PETS:2000). I estimate a multinomial logit of college choice where student's choice set is defined across four alternatives: no college, a for-profit college, a non-profit 2-year (or less-than-2-year) college, and a non-selective non-profit 4-year college. I find that students self-select into for-profit sector. Three groups of significant factors stand out. First, choice of for-profit sector is characterized by lower parental involvement in student's schooling. Second, ceteris paribus, for-profit-bound students are more likely to display high levels of school absenteeism and to give birth as early as 10th grade. Third, the average predicted probabilities of choosing for-profit sector increase as in-state public community college tuition rises and county-specific concentration of for-profit providers grows larger.

Suggested Citation

  • Chung, Anna, 2008. "The Choice of For-Profit College," MPRA Paper 18971, University Library of Munich, Germany, revised Nov 2009.
  • Handle: RePEc:pra:mprapa:18971
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    Cited by:

    1. 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.
    2. Stephanie Riegg Cellini & Claudia Goldin, 2014. "Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 174-206, November.
    3. 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.
    4. Caviris, Nicole Stefanie, 2014. "Educational attainment, college major choice, the gender wage gap, and average starting salaries of college graduates in the United States, 1967-2011," ISU General Staff Papers 201401010800004865, Iowa State University, Department of Economics.
    5. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    6. 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.
    7. Chung, Anna, 2008. "The Effects of For-Profit College Training on Earnings," MPRA Paper 18972, University Library of Munich, Germany, revised May 2009.
    8. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.
    9. Chung, Anna, 2008. "For-Profit Student Heterogeneity," MPRA Paper 18967, University Library of Munich, Germany, revised Nov 2009.

    More about this item

    Keywords

    for-profit; private; education; college; choice; vocational; workforce; training;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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