IDEAS home Printed from https://ideas.repec.org/p/edj/ceauch/334.html
   My bibliography  Save this paper

Returns to Higher Education: Vocational Education vs College

Author

Listed:
  • Ana Maria Montoya
  • Carlos Noton
  • Alex Solis

Abstract

Students scoring above a given threshold in the college admission test are eligible for education loans in Chile. Given the random variation in college enrollment induced by this cutoff rule, we use a regression discontinuity design to identify the marginal returns of vocational education versus college education. We use individual-level data on educational background and labor history for the universe of test takers in 2007.We find no differences in earnings, employment, or participation in the formal sector. Given the more expensive tuition fees, more years of instruction, and lower probability of graduation, the students induced to enroll in college have suffered from high-income losses in the margin. Key words:

Suggested Citation

  • Ana Maria Montoya & Carlos Noton & Alex Solis, 2017. "Returns to Higher Education: Vocational Education vs College," Documentos de Trabajo 334, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:334
    as

    Download full text from publisher

    File URL: http://www.cea-uchile.cl/wp-content/uploads/doctrab/ASOCFILE120171227090644.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    2. Hansen, Karsten T. & Heckman, James J. & Mullen, K.J.Kathleen J., 2004. "The effect of schooling and ability on achievement test scores," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 39-98.
    3. Jorge Rodríguez & Sergio Urzúa & Loreto Reyes, 2016. "Heterogeneous Economic Returns to Post-Secondary Degrees: Evidence from Chile," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 416-460.
    4. 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.
    5. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    6. Carolina González-Velosa & Graciana Rucci & Miguel Sarzosa & Sergio Urzúa, 2015. "Returns to Higher Education in Chile and Colombia," IDB Publications (Working Papers) 88676, Inter-American Development Bank.
    7. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    8. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    9. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
    10. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
    11. Lars Kirkebøen & Edwin Leuven & Magne Mogstad, 2014. "Field of Study, Earnings, and Self-Selection," NBER Working Papers 20816, National Bureau of Economic Research, Inc.
    12. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    13. Christopher Jepsen & Kenneth Troske & Paul Coomes, 2014. "The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 95-121.
    14. Joshua Goodman & Michael Hurwitz & Jonathan Smith, 2017. "Access to 4-Year Public Colleges and Degree Completion," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 829-867.
    15. Alex Solis, 2017. "Credit Access and College Enrollment," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 562-622.
    16. Tomás Rau & Eugenio Rojas & Sergio Urzúa, 2013. "Loans for Higher Education: Does the Dream Come True?," NBER Working Papers 19138, National Bureau of Economic Research, Inc.
    17. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    18. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 933-959.
    19. González-Velosa, Carolina & Rucci, Graciana & Sarzosa, Miguel & Urzúa, Sergio, 2015. "Returns to Higher Education in Chile and Colombia," IDB Publications (Working Papers) 6858, Inter-American Development Bank.
    20. Seth D. Zimmerman, 2014. "The Returns to College Admission for Academically Marginal Students," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 711-754.
    21. Jeffrey T. Denning, 2017. "College on the Cheap: Consequences of Community College Tuition Reductions," American Economic Journal: Economic Policy, American Economic Association, vol. 9(2), pages 155-188, May.
    22. 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.
    23. Erica Field, 2009. "Educational Debt Burden and Career Choice: Evidence from a Financial Aid Experiment at NYU Law School," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 1-21, January.
    24. Harald Beyer & Justine Hastings & Christopher Neilson & Seth Zimmerman, 2015. "Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile," American Economic Review, American Economic Association, vol. 105(5), pages 508-513, May.
    25. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    26. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Solis, Alex, 2019. "Measuring the Effect of Student Loans on the College Dropout Rate," Working Paper Series 2019:8, Uppsala University, Department of Economics.
    2. Yoshimichi Murakami & Tomokazu Nomura, 2023. "Decline in values of degrees and recent evolution of wage inequality: Evidence from Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 50(1 Year 20), pages 55-132, June.
    3. Alonso Bucarey & Dante Contreras & Pablo Muñoz, 2018. "Labor Market Returns to Student Loans," Working Papers wp464, University of Chile, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Montoya, Ana Maria & Noton, Carlos & Solis, Alex, 2018. "The Returns to College Choice: Loans, Scholarships and Labor Outcomes," Working Paper Series 2018:12, Uppsala University, Department of Economics.
    2. Alex Solis, 2017. "Credit Access and College Enrollment," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 562-622.
    3. Seth D. Zimmerman, 2014. "The Returns to College Admission for Academically Marginal Students," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 711-754.
    4. Gurgand, Marc & Lorenceau, Adrien & Mélonio, Thomas, 2023. "Student loans: Credit constraints and higher education in South Africa," Journal of Development Economics, Elsevier, vol. 161(C).
    5. Ivan A Canay & Vishal Kamat, 2018. "Approximate Permutation Tests and Induced Order Statistics in the Regression Discontinuity Design," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1577-1608.
    6. Vergolini, Loris & Zanini, Nadir, 2015. "Away, but not too far from home. The effects of financial aid on university enrolment decisions," Economics of Education Review, Elsevier, vol. 49(C), pages 91-109.
    7. Martin Nordin & Gawain Heckley & Ulf‐G. Gerdtham, 2020. "Impact Of A Tertiary Eligibility Threshold On Tertiary Education And Earnings: A Discontinuity Approach," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 401-424, January.
    8. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    9. Adrien Montalbo, 2019. "Education and economic development. The influence of primary schooling on municipalities in nineteenth-century France," Working Papers halshs-02286126, HAL.
    10. Loris Vergolini & Nadir Zanini, 2012. "How does aid matter? The effect of financial aid on university enrolment decisions," Working Papers 2012/7, Institut d'Economia de Barcelona (IEB).
    11. Adrien Montalbo, 2020. "Education supply and economic growth in nineteenth-century France," Working Papers halshs-02482643, HAL.
    12. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    13. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    14. Heinesen, Eskil, 2018. "Admission to higher education programmes and student educational outcomes and earnings–Evidence from Denmark," Economics of Education Review, Elsevier, vol. 63(C), pages 1-19.
    15. Loris Vergolini & Nadir Zanini, 2012. "How does aid matter? The effect of financial aid on university enrolment decisions," Working Papers 2012/7, Institut d'Economia de Barcelona (IEB).
    16. Adrien Montalbo, 2019. "Education and economic development. The influence of primary schooling on municipalities in nineteenth-century France," PSE Working Papers halshs-02286126, HAL.
    17. Adrien Montalbo, 2020. "Education supply and economic growth in nineteenth-century France," PSE Working Papers halshs-02482643, HAL.
    18. Alonso Bucarey & Dante Contreras & Pablo Muñoz, 2018. "Labor Market Returns to Student Loans," Working Papers wp464, University of Chile, Department of Economics.
    19. Dong, Yingying, 2010. "Jumpy or Kinky? Regression Discontinuity without the Discontinuity," MPRA Paper 25461, University Library of Munich, Germany.
    20. Adam C. Sales & Ben B. Hansen, 2020. "Limitless Regression Discontinuity," Journal of Educational and Behavioral Statistics, , vol. 45(2), pages 143-174, April.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edj:ceauch:334. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ceuclcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.