IDEAS home Printed from https://ideas.repec.org/p/vcu/wpaper/0805.html
   My bibliography  Save this paper

Increasing Returns to Education and Progress towards a College Degree

Author

Listed:
  • Leslie S Stratton

    (Department of Economics, VCU School of Business)

  • James N. Wetzel

    (Department of Economics, VCU School of Business)

Abstract

Returns to college have increased, but graduation rates have changed relatively little. Modifying a human capital model of college enrollment to endogenize time-to-graduation, we predict that higher returns to education will both speed graduation and increase enrollment. Some of those new entrants may, however, take longer to graduate. Using the 1989 and 1995 Beginning Postsecondary Studies, we employ a multinomial logit to model the association between individual and family characteristics, and five-year college outcomes: graduation, continued enrollment, and non-enrollment. Between cohort differences arise either because the characteristics of those entering college are different or because the relations between characteristics and outcomes have changed. We utilize a Oaxaca-Blinder style decomposition to distinguish between these two alternatives, attributing differences in characteristics to newly attracted students and differences in the relations between characteristics and outcomes to historically attracted students behaving differently. It is changes in behavior that explain the increased progress we observe.

Suggested Citation

  • Leslie S Stratton & James N. Wetzel, 2008. "Increasing Returns to Education and Progress towards a College Degree," Working Papers 0805, VCU School of Business, Department of Economics.
    • Handle: RePEc:vcu:wpaper:0805
    as

    Download full text from publisher

    File URL: http://www.people.vcu.edu/~okorenok/StrattonWetzelIncreasingReturnsAugust2008.pdf
    File Function: First version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stratton, Leslie S. & O'Toole, Dennis M. & Wetzel, James N., 2006. "Are the Factors Affecting Dropout Behavior Related to Initial Enrollment Intensity for College Undergraduates?," IZA Discussion Papers 1951, Institute of Labor Economics (IZA).
    2. Christopher Dougherty, 2005. "Why Are the Returns to Schooling Higher for Women than for Men?," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 969-988.
    3. Lisa Barrow & Cecilia Elena Rouse, 2005. "Do Returns to Schooling Differ by Race and Ethnicity?," American Economic Review, American Economic Association, vol. 95(2), pages 83-87, May.
    4. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    5. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-740, November.
    6. Altonji, Joseph G, 1993. "The Demand for and Return to Education When Education Outcomes Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 48-83, January.
    7. Shouping Hu & Edward P. St. John, 2001. "Student Persistence in a Public Higher Education System," The Journal of Higher Education, Taylor & Francis Journals, vol. 72(3), pages 265-286, May.
    8. Manski, Charles F., 1989. "Schooling as experimentation: a reappraisal of the postsecondary dropout phenomenon," Economics of Education Review, Elsevier, vol. 8(4), pages 305-312, August.
    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. Miki Malul, 2012. "A Dynamic Brain Drain in Peripheral Regions," ERSA conference papers ersa12p230, European Regional Science Association.
    2. Holmgren, Mark & McCracken, Vicki A., 2010. "Identifying Student Success at a Land Grant Institution," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61701, Agricultural and Applied Economics Association.

    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. Angela Boatman & Bridget Terry Long, 2016. "Does Financial Aid Impact College Student Engagement?," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(6), pages 653-681, September.
    2. Lutz Hendricks & Oksana Leukhina, 2018. "The Return To College: Selection And Dropout Risk," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1077-1102, August.
    3. Aina, Carmen & Baici, Eliana & Casalone, Giorgia & Pastore, Francesco, 2022. "The determinants of university dropout: A review of the socio-economic literature," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    4. Lauren Schudde & Judith Scott-Clayton, 2016. "Pell Grants as Performance-Based Scholarships? An Examination of Satisfactory Academic Progress Requirements in the Nation’s Largest Need-Based Aid Program," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(8), pages 943-967, December.
    5. Dennis A. Ahlburg & Brian P. Mccall & In-gang Na, "undated". "Time to Dropout From College: A Hazard Model with Endogenous Waiting," Working Papers 0102, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    6. Audrey Light & Wayne Strayer, 2004. "Who Receives the College Wage Premium?: Assessing the Labor Market Returns to Degrees and College Transfer Patterns," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
    7. Jason M. Lindo & Nicholas J. Sanders & Philip Oreopoulos, 2010. "Ability, Gender, and Performance Standards: Evidence from Academic Probation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 95-117, April.
    8. Ralph Stinebrickner & Todd R. Stinebrickner, 2014. "A Major in Science? Initial Beliefs and Final Outcomes for College Major and Dropout," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 426-472.
    9. Ralph Stinebrickner & Todd Stinebrickner, 2008. "The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study," American Economic Review, American Economic Association, vol. 98(5), pages 2163-2184, December.
    10. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
    11. Aina, Carmen & Baici, Eliana & Casalone, Giorgia & Pastore, Francesco, 2018. "The Economics of University Dropouts and Delayed Graduation: A Survey," IZA Discussion Papers 11421, Institute of Labor Economics (IZA).
    12. Vignoles Anna F & Powdthavee Nattavudh, 2009. "The Socioeconomic Gap in University Dropouts," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-36, April.
    13. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
    14. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective completion beliefs and the demand for post-secondary education," ECON - Working Papers 218, Department of Economics - University of Zurich.
    15. Fortin, Bernard & Ragued, Safa, 2017. "Does temporary interruption in postsecondary education induce a wage penalty? Evidence from Canada," Economics of Education Review, Elsevier, vol. 58(C), pages 108-122.
    16. Backes-Gellner, Uschi & Herz, Holger & Kosfeld, Michael & Oswald, Yvonne, 2021. "Do preferences and biases predict life outcomes? Evidence from education and labor market entry decisions," European Economic Review, Elsevier, vol. 134(C).
    17. Ferreyra,Maria Marta & Garriga,Carlos & Martin,Juan David & Sanchez Diaz,Angelica Maria, 2020. "Raising College Access and Completion : How Much Can Free College Help ?," Policy Research Working Paper Series 9428, The World Bank.
    18. Mehran Ebrahimian & Jessica Wachter, 2020. "Risks to Human Capital," NBER Working Papers 26823, National Bureau of Economic Research, Inc.
    19. Bond, Timothy N. & Bulman, George & Li, Xiaoxiao & Smith, Jonathan, 2016. "Updated Expectations and College Application Portfolios," MPRA Paper 69317, University Library of Munich, Germany.
    20. Rossella Iraci Capuccinello, 2014. "Determinants and timing of dropping out decisions: evidence from the UK FE sector," Working Papers 15742191, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

    Higher Education; Graduation Rates; Persistence;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

    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:vcu:wpaper:0805. 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: Oleg Korenok (email available below). General contact details of provider: https://edirc.repec.org/data/edvcuus.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.