Education decisions and labour market outcomes

Jessica Scheld

Applied Economics, 2019, vol. 51, issue 9, 911-940

Abstract: The financial return to a college degree is an increasing concern amid rising tuition costs and stagnant wages. Using the Education Longitudinal Study of 2002 (ELS:2002), I analyse the effect of post-secondary choices on wages for individuals entering the labour force between 2004 and 2012. Matching methods provide evidence of strong returns to earning a bachelor’s degree for both genders, similar to previous literature. Relative to high school graduates, women see wage benefits of 8–21% for some college attendance. However, men see negative effects of between 6%–13% from some college relative to high school graduates. The returns to a sub-baccalaureate degree as compared to earning some two-year credits is between 8%–25% for women and 8–14% for men. Further, the wage returns to a sub-baccalaureate degree as compared to earning some four-year credits is between 9%–17% for women and 9–20% for men. This translates into an additional $2,500-$4,700 per year for women and an additional $2,900-$6,400 per year for men. Since the average respondent with some four-year college experience has 2.3 years of earned post-secondary credits, shifting some into sub-baccalaureate programs may substantially decrease both the financial and time commitments of post-secondary education while increasing the returns after degree attainment.

Date: 2019
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DOI: 10.1080/00036846.2018.1512741

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