The Economics of Persistence: Graduation Rates of Athletes as Labor Market Choice

The issue of compatibility of athletics and academics has led to much concern over the observed disparity in graduation rates of scholarship athletes across institutions. It is ironic that no one mentions that graduation rates for nonathletes also vary dramatically across campuses. Our approach is to consider the decision to persist in school as part of the economic calculation made by students comparing alternative labor market returns. If there is very little marginal value to holding a degree from a particular school, relatively few students should persist to graduation. For some scholarship athletes, there is another labor market alternative not available to the traditional student: professional sports. Graduation rates for these athletes should therefore reflect their opportunities in sports as well as the more traditional opportunities available to other students at the same school. We analyze data for each Division I NCAA school on academic characteristics, athletic characteristics and graduation rates. Three groups of athletes are studied: male football players, male basketball players and female basketball players. We find strong empirical evidence that traditional labor market opportunities unrelated to sport are significant explanatory variables of persistence of athletes. In addition, we find support for the hypothesis that professional opportunities have a significant impact on the graduation rate of athletes. This impact is stronger in sports with higher expected financial returns from this form of non- degree employment.