The return to college: Selection and dropout risk

Lutz Hendricks and Oksana Leukhina

No 487, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: This paper studies the effect of graduating from college on lifetime earnings. We develop a quantitative model of college choice with uncertain graduation. Departing from much of the literature, we model in detail how students progress through college. This allows us to parameterize the model using transcript data. College transcripts reveal substantial and persistent heterogeneity in students' credit accumulation rates that are strongly related to graduation outcomes. From this data, the model infers a large ability gap between college graduates and high school graduates that accounts for 54% of the college lifetime earnings premium.

Keywords: Education; College premium; College dropout risk (search for similar items in EconPapers)
JEL-codes: E24 I21 J24 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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https://www.econstor.eu/bitstream/10419/103458/1/800973720.pdf (application/pdf)

Related works:
Journal Article: THE RETURN TO COLLEGE: SELECTION AND DROPOUT RISK (2018)
Working Paper: The Return to College: Selection and Dropout Risk (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:487

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