Estimating the Return to College Selectivity over the Career Using Administrative Earning Data
Data show that a college education gives graduates enhanced job opportunities and income over the course of a lifetime — especially for those working in technical fields. But it is difficult to say whether a talented high school senior would necessarily earn more by graduating from an elite college than by graduating from a less selective one.
A 2011 paper from Princeton University, “Estimating the Return to College Selectivity over the Career Using Administrative Earning Data,” analyzed the monetary value of attending a highly selective college over time. The study examined College and Beyond survey data on post-college earnings and Social Security Administration Detailed Earnings Records between 1981 and 2007 for two groups of freshmen enrolled at a range of colleges and universities in 1976 and 1989. A college’s elite status was determined by Barron’s index of college selectivity, the school’s net tuition and the average SAT scores of its students. The researchers also factored in “unobserved” student traits based on the selectivity of the schools a student applied to, with the premise that students “signal their potential ability, motivation and ambition by the choice of schools they apply to.”
Key study findings include:
- Attendance at a more elite school — one with an average SAT score 100 points or higher than the mean — is associated with 7% higher lifetime earnings. When a variable for “unobserved student characteristics” such as motivation or ambition is factored in, however, the effect drops to almost zero.
- Monetary returns for male graduates in the 1979 group peaked at nearly 9% in 1998-2009, while those for women peaked at nearly 6% in 2003-2007; students in the 1989 group experienced similar gains. Again, factoring in qualitative characteristics such as motivation or ambition eliminated all statistical significance.
- The exceptions to this general finding, however, were black and Hispanic students and students who come from less-educated families. For these subgroups, the “estimates of the return to college selectivity remain large, even in models that adjust for unobserved student characteristics.”
- For African-American and Hispanic students in the 1979 group, attendance at an elite school provided 6.7% higher earnings in 2003-2007. Similar students in the 1989 group saw a 12% rate of return for attending an elite school.
- A student attending an elite school whose parents had completed high school earned 5.2% more over time; a student whose parents had earned at least undergraduate degrees, saw virtually no monetary returns to attending a more elite college.
- “The average SAT score of schools that rejected a student is more than twice as strong a predictor of the student’s subsequent earnings as the average SAT score of the school the student attended.” In other words, the quality of the schools a student was interested in attending was more a predictor of future earnings than the quality of the school a student actually attended.
The authors caution that their findings “suggest that the typical student does not unambiguously benefit from attending the most selective college to which he or she was admitted. Rather, our results would suggest that students need to think carefully about the fit between their abilities and interests, the attributes of the school they attend and their career aspirations.”
Tags: race, employment, higher education
Read the study-related Information Management post titled "Modeling an IT Earnings Disparity."
- What key insights from the article should reporters be aware of as they cover issues related to the benefits of a degree from an elite college?
Read the full report titled "Estimating the Return to College Selectivity over the Career Using Administrative Earning Data."
- What are the report's key technical term(s)? Which ones need to be put into language a lay audience can understand?
- Do the report’s authors put the research into context and show how they are advancing the state of knowledge about the subject? If so, what did the previous research indicate?
- What is the report’s research method? If there are statistical results, how did the scholars arrive at them?
- Evaluate the report's limitations. (For example, are there weaknesses in the study's data or research design?)
- How could the findings be misreported or misinterpreted by a reporter? In other words, what are the difficulties in conveying the data accurately? Give an example of a faulty headline or story lead.
Newswriting and digital reporting assignments
- Write a lead, headline or nut graph based on the study.
- Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
- Compose two Twitter messages of 140 characters or fewer accurately conveying the study’s findings to a general audience. Make sure to use appropriate hashtags.
- Choose several key quotations from the study and show how they would be set up and used in a brief blog post.
- Map out the structure for a 60-second video segment about the study. What combination of study findings and visual aids could be used?
- Find pictures and graphics that might run with a story about the study. If appropriate, also find two related videos to embed in an online posting. Be sure to evaluate the credibility and appropriateness of any materials you would aggregate and repurpose.
Class discussion questions
- What is the study’s most important finding?
- Would members of the public intuitively understand the study’s findings? If not, what would be the most effective way to relate them?
- What kinds of knowledgeable sources you would interview to report the study in context?
- How could the study be “localized” and shown to have community implications?
- How might the study be explained through the stories of representative individuals? What kinds of people might a reporter feature to make such a story about the study come alive?
- What sorts of stories might be generated out of secondary information or ideas discussed in the study?