Returns to Education Quality for Low-Skilled Students: Evidence from a Discontinuity

Canaan, Serena and Mouganie, Pierre (2014): Returns to Education Quality for Low-Skilled Students: Evidence from a Discontinuity.

Abstract

This paper studies the labor market returns to quality of higher education for low-skilled students. Using a regression discontinuity design, we compare students who marginally pass and marginally fail the French high school exit exam from the first attempt. Threshold crossing leads to an improvement in the quality, but has no effect on the quantity, of higher education pursued. Specifically, students who marginally pass are more likely to enroll in STEM majors and universities with better peers. Further, marginally passing increases earnings by 13.6 percent at the age of 27 to 29. Our findings show that low-skilled students experience large gains from having the opportunity to access higher quality postsecondary education.

• Item Type: MPRA Paper
• Language: English
• Keywords: Quality of education, returns to education, regression discontinuity design
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H52 - Government Expenditures and Education; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I21 - Analysis of Education; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I23 - Higher Education ; Research Institutions; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

References

Andrews, R.J., Li, J., Lovenheim, M.F., 2012. Quantile Treatment Effects of College Quality on Earnings: Evidence from Administrative Data in Texas. NBER Working Paper 18068.

Barreca, A.I., Lindo, J.M., Waddell, J.R., Forthcoming. Heaping-induced bias in regression-discontinuity designs. Economic Inquiry.

Black, D.A., Smith, J.A., 2006. Estimating the Returns to College Quality with Multiple Proxies for Quality. Journal of Labor Economics, 24 (3): 701-728.

Bowen, W.G., Chingos, M.M., McPherson M.S., 2009. Crossing the finish line. Princeton: Princeton University Press.

Brewer, D., Eide, E., Ehrenberg, R., 1999. Does it Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects of College Type on Earnings. Journal of Human Resources. 34 (1): 104-123.

Buchaillat, M., Fort, M., Gauthier, R.F., Olivier, M., Steiner, R., Mathias, P., Kesler, S., 2011. Propositions pour une l'evolution du baccalaureat. Rapport de l'inspection generale de l'education nationale No. 2011-117.

Calonico, S., Cattaneo, M,D., Titiunik, R., 2014. Robust Nonparametric Confidence Intervals for Regression-Discontinuity Designs. Econometrica. 82 (6): 2295-2326.

Clark, D., Martorell, P., 2014. The Signaling Value of a High School Diploma. Journal of Political Economy, 122 (2): 282-318.

Clark, D., See, E., 2011. The impact of tougher education standards: Evidence from Florida. Economics of Education Review, 30 (6): 1123-1135.

Dahl, G.B., L\o{ken}, K.V., Mogstad, M., 2014. Peer Effects in Program Participation. American Economic Review, 104 (7): 2049-2074.

Dale, S.B., Krueger, A.B., 2002. Estimating the payoff to attending a more selective college: An application of selection on observables and unobservables. The Quarterly Journal of Economics, 17 (4): 1491-1527.

Dee, T.S., Jacob, B.A., Rockoff, J.E., McCrary, J., 2011. Rules and discretion in the evaluation of students and schools: The case of the New York regents examinations. Columbia Business School Research Paper.

Enquete sur l'entree dans la vie adulte des eleves entres en 6eme en 1995 (EVA) - 2005-2011 - (2011) [fichier electronique], INSEE [producteur], Centre Maurice Halbwachs (CMH) [diffuseur].

Goodman, J., Hurwitz, M., Smith, J., 2015. College access, initial college choice and degree completion. NBER Working Paper 20996.

Hamermesh, D.S., Donald, S.G., 2008. The effect of college curriculum on earnings: An affinity identifier for non-ignorable non-response bias. Journal of Econometrics, 144 (2): 479-491.

Hastings, J.S., Neilson, C.A., Zimmerman, S.D., 2013. Are some degrees worth more than others? Evidence from college admission cutoffs in Chile. NBER Working Paper 19241.

Hoekstra, M., 2009. The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach. The Review of Economics and Statistics, 91 (4), 717-24.

Hoxby, C., Avery, C., 2014. The Missing One-Offs: The Hidden Supply of High-Achieving Low- Income Students. Brookings Papers on Economic Activity. (Spring): 1–61.

Imbens, G.W., Lemieux, T., 2008. Regression discontinuity designs: A guide to practice. Journal of Econometrics, 142 (2), 615-35.

Jacob, B.A., Levitt, S.D., 2003. Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating. The Quarterly Journal of Economics} 118 (3): 843-877.

Kirkeboen, L., Leuven, E., Mogstad, M., 2014. Field of Study, Earnings, and Self-Selection. NBER Working Paper 20816.

Lee, D.S, Card, D. 2008. Regression discontinuity inference with specification error. Journal of Econometrics, 142 (2), 655-674.

Lee, D.S., Lemieux, T., 2010. Regression discontinuity designs in economics. Journal of Economic Literature, 48 (2), 281-355.

Martorell, P., 2004. Do High School Graduation Exams Matter? A Regression Discontinuity Approach, UC Berkeley Manuscript.

Martorell, P., McFarlin Jr., I., 2011. Help or hindrance? The effects of college remediation on academic and labor market outcomes. The Review of Economics and Statistics, 93(2): 436-454.

McRary, J., 2008. Manipulation of the Running Variable in the Regression Discontinuity Design: A Density Test. Journal of Econometrics, 142(2), 698-714.

Ou, D., 2010. To Leave or Not to Leave? A Regression Discontinuity Analysis of the Impact of Failing the High School Exit Exam. Economics of Education Review, 29 (2), 171-186.

Panel d'eleves du second degre, recrutement 1995 - 1995-2011 - (2006) [fichier electronique], DEPP | INSEE [producteur], Centre Maurice Halbwachs (CMH)[diffuseur].

Papay, J.P., Murnane, R.J., Willett, J.B., 2010. The Consequences of High School Exit Examinations for Low-Performing Urban Students: Evidence from Massachusetts. Educational Evaluation and Policy Analysis. 32(1): 5-23.

Roderick, M., Nagaoka, J., Coca V., Moeller, E., 2008. From High School to the Future: Potholes on the road to college. Consortium on Chicago School Research at University of Chicago.

Saavedra, J., 2009. The Learning and Early Labor Market Effects of College Quality: A Regression Discontinuity Analysis. Rand Corporation Working Paper.

Smith, J., Hurwitz, M., Howell, J., 2013. The Full extent of Academic Undermatch. Economics of Education Review, 32: 247-261.

Zimmerman, S., 2014. The Returns to College Admission for Academically Marginal Students. Journal of Labor Economics, 32 (4): 711-754.