Making college worth it: A review of the returns to higher education

Future of Children

Volumn 23, Issue 1, 2013, Pages 41-65

  Oreopoulos, Philip ^a   Petronijevic, Uros ^a  

^a UNIVERSITY OF TORONTO   (Canada)

Author keywords

[No Author keywords available]

Indexed keywords

CANADA; COST BENEFIT ANALYSIS; DECISION MAKING; ECONOMICS; EDUCATION; EDUCATIONAL STATUS; FORECASTING; HUMAN; INCOME; TRENDS;

CAREER CHOICE; COST-BENEFIT ANALYSIS; EDUCATION; EDUCATIONAL STATUS; FORECASTING; HUMANS; INCOME; ONTARIO;

EID: 84877724954     PISSN: 10548289     EISSN: 15501558     Source Type: Journal    
DOI: 10.1353/foc.2013.0001     Document Type: Review

References (75)

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2. "Education and Unemployment, " Washington Post, February 27, 2012 (www.washingtonpost.com/politics/ education-and-unemployment/2012/02/27/gIQARNmzeR_graphic.html).
3. Caralee Adams, "New Study Tracks Lifetime Income Based on College Major, " College Bound (Education Week blog), March 24, 2011 (http://blogs.edweek.org/edweek/college_bound/2011/05/new_study_tracks_lifetime_income_based_on_ college_major.html?qs=lifetime+college+earning).
4. Christopher Avery and Sarah E. Turner, "Student Loans: Do College Students Borrow Too Much-Or Not Enough?" Journal of Economic Perspectives 26, no. 1 (2012): 165-92.
5. John Bound, Michael Lovenheim, and Sarah E. Turner, Increasing Time to Baccalaureate Degree in the United States, report prepared for the Population Studies Center (University of Michigan Institute for Social Research, April 2010).
6. Sarah E. Turner, "Going to College and Finishing College: Explaining Different Educational Outcomes, " in College Choices: The Economics of Where to Go, When to Go, and How to Pay for It, edited by Caroline M. Hoxby (University of Chicago Press, 2004), pp. 13-61.
7. Returns are uncertain-individuals must form some expectations about the set of likely outcomes under different college options versus not going at all. Those risk-averse will be less interested in college than in cases ignoring uncertainty if the chances of large returns are small.
8. Sarah E. Turner, "Going to College and Finishing College: Explaining Different Educational Outcomes, " in College Choices: The Economics of Where to Go, When to Go, and How to Pay for It, edited by Caroline M. Hoxby (University of Chicago Press, 2004), pp. 13-61.
9. For a discussion of how benefits may differ across individuals, see Pedro Carneiro, James J. Heckman, and Edward J. Vytlacil, "Estimating Marginal Returns to Education, " American Economic Review 101 (2011): 2754-81.
10. Lance Lochner and Alexander Monge-Narnjo, "Credit Constraints in Education, " Annual Review of Economics (forthcoming).
11. Philippe Belley and Lance Lochner, "The Changing Role of Family Income and Ability in Determining Educational Achievement, " Journal of Human Capital 1, no. 1 (2007): 37-89.
12. Judith Scott-Clayton, "What Explains Trends in Labor Supply among U.S. Undergraduates, 1970-2009?" Working Paper 17744 (Cambridge, Mass.: National Bureau of Economic Research, January 2012).
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14. James J. Heckman, Lance J. Lochner, and Petra E. Todd, "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond, " in Handbook of the Economics of Education, vol. 1, edited by Eric A. Hanushek and Finis Welch (Elsevier, 2006), pp. 307-458.
15. For an empirical analysis of the option value of college, see Kevin M. Stange, "An Empirical Examination of the Option Value of College Enrollment, " American Economic Journal: Applied Economics, forthcoming.
16. James J. Heckman, Lance J. Lochner, and Petra E. Todd, "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond, " in Handbook of the Economics of Education, vol. 1, edited by Eric A. Hanushek and Finis Welch (Elsevier, 2006), pp. 307-458.
17. For an empirical analysis of the option value of college, see Kevin M. Stange, "An Empirical Examination of the Option Value of College Enrollment, " American Economic Journal: Applied Economics, forthcoming.
18. Eric P. Bettinger and others, "The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment, " Working Paper 15361 (Cambridge, Mass.: National Bureau of Economic Research, September 2009).
19. For a description of the trend in the college premium throughout the twentieth century and into the twenty-first, see Claudia Goldin and Lawrence F. Katz, "The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005, " Working Paper 12984 (Cambridge, Mass.: National Bureau of Economic Research, March 2007).
20. Anthony P. Carnevale, Stephen J. Rose, and Ban Cheah, The College Payoff: Education, Occupations, Lifetime Earnings, report prepared for the Center on Education and the Workforce (Georgetown University, 2011).
21. Christopher Avery and Sarah E. Turner, "Student Loans: Do College Students Borrow Too Much-Or Not Enough?" Journal of Economic Perspectives 26, no. 1 (2012): 165-92.
22. Christopher Avery and Sarah E. Turner, "Student Loans: Do College Students Borrow Too Much-Or Not Enough?" Journal of Economic Perspectives 26, no. 1 (2012): 165-92.
23. Anthony P. Carnevale, Stephen J. Rose, and Ban Cheah, The College Payoff: Education, Occupations, Lifetime Earnings, report prepared for the Center on Education and the Workforce (Georgetown University, 2011).
24. In each figure appearing in this chapter, annual earnings are approximated by multiplying weekly earnings by fifty-two. To focus on the more recent cohorts, all figures analyze workers aged thirty to fifty, while figures 1 and 2 analyze only the years 2010 and 2011, respectively. Consequently, none of the figures should be interpreted as making statements about the "lifetime" earnings of individuals.
25. Christopher Avery and Sarah E. Turner, "Student Loans: Do College Students Borrow Too Much-Or Not Enough?" Journal of Economic Perspectives 26, no. 1 (2012): 165-92.
26. David Autor, "The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings, " report prepared for the Hamilton Project and the Center of American Progress (April 2010).
27. Thomas Lemieux and David Card, "Education, Earnings, and the 'Canadian G.I. Bill', " Canadian Journal of Economics 34, no. 2 (2001): 313-44.
28. David Card, "Using Geographic Variation in College Proximity to Estimate the Return to Schooling, " in Aspects of Labor Market Behaviour: Essays in Honour of John Vanderkamp, edited by Louis N. Christofides, E. Kenneth Grant, and Robert Swidinsky (University of Toronto Press, 1995), pp. 201-22.
29. John Bound and Sarah E. Turner, "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?" Journal of Labor Economics 20, no. 4 (2002): 784-815.
30. Marcus Stanley, "College Education and the Midcentury GI Bills, " Quarterly Journal of Economics 118, no. 2 (2003): 671-708
31. Joshua D. Angrist and Stacey H. Chen, "Schooling and the Vietnam-Era GI Bill: Evidence from the Draft Lottery, " American Economic Journal: Applied Economics 3 (April 2011): 96-119.
32. Joshua D. Angrist and Stacey H. Chen, "Schooling and the Vietnam-Era GI Bill: Evidence from the Draft Lottery, " American Economic Journal: Applied Economics 3 (April 2011): 96-119.
33. Thomas Lemieux and David Card, "Education, Earnings, and the 'Canadian G.I. Bill', " Canadian Journal of Economics 34, no. 2 (2001): 313-44.
34. Jennie E. Brand and Yue Xie, "Who Benefits Most from College? Evidence for Negative Selection in Heterogeneous Economic Returns to Higher Education, " American Sociological Review 75, no. 2 (2010): 273-302.
35. Seth Zimmerman, "The Returns to Four-Year College for Academically Marginal Students, " Discussion Paper 6107 (Bonn, Germany: Institute for the Study of Labor, November 2011).
36. Because some students just below the threshold attended a community college, the estimate of 8.7 percent can be understood as a lower bound on the return to college over obtaining only a high school diploma.
37. Thomas J. Kane and Cecilia Elena Rouse, "Labor-Market Returns to Two-and Four-Year College, " American Economic Review 85, no. 3 (1995): 600-14.
38. Christopher Jepsen, Kenneth Troske, and Paul Coomes, "The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates, " report prepared for the Center for Poverty Research (University of Kentucky, October 2009).
39. Stephanie Riegg Cellini and Latika Chaudhary, "The Labor Market Returns to a Private Two-Year College Education, " George Washington University working paper (April 2011).
40. Claudia Goldin and Lawrence F. Katz, The Race between Education and Technology (Harvard University Press, 2008).
41. Daron Acemoglu and David Autor, "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology, " Working Paper 17820 (Cambridge, Mass.: National Bureau of Economic Research, February 2012).
42. Claudia Goldin and Lawrence F. Katz, The Race between Education and Technology (Harvard University Press, 2008).
43. David Autor, "The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings, " report prepared for the Hamilton Project and the Center of American Progress (April 2010).
44. David Autor, "The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings, " report prepared for the Hamilton Project and the Center of American Progress (April 2010).
45. Anthony P. Carnevale and Stephen J. Rose, "The Undereducated American, " report prepared for the Center on Education and the Workforce (Georgetown University, 2011).
46. Pedro Carneiro and Sokbae Lee, "Trends in Quality-Adjusted Skill Premia in the United States, 1960-2000. " Discussion Paper 6107 (Bonn, Germany: Institute for the Study of Labor, October 2010).
47. While higher college enrollment led to a decline in the average quality of college graduates, the authors are unable to distinguish between two competing interpretations of their finding. On one hand, an enrollment expansion draws in less prepared students, which results in a decline in average student quality. On the other, increased enrollment that is not accompanied by an increase in institutional resources will likely result in a lower-quality learning experience in college.
48. Richard Arum and Jospia Roksa, Academically Adrift: Limited Learning on College Campuses (University of Chicago Press, 2011).
49. Peter Arcidiacono, Patrick Bayer, and Aurel Hizmo, "Beyond Signaling and Human Capital: Education and the Revelation of Ability, " American Economic Journal: Applied Economics 2 (October 2010): 76-104.
50. For a recent analysis on earnings differences by institutional quality see Mark Hoekstra, "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Base Approach, " Review of Economics and Statistics 91 no. 4 (2009): 717-24.
51. Philip Oreopoulos and Kjell G. Salvanes, "Priceless: The Nonpecuniary Benefits of Schooling, " Journal of Economic Perspectives 25, no. 1 (Winter 2011): 159-84.
52. Michael Hout, "Social and Economic Returns to College in the United States. " Annual Review of Sociology 38 (2011): 379-400.
53. Philip Oreopoulos and Kjell G. Salvanes, "Priceless: The Nonpecuniary Benefits of Schooling, " Journal of Economic Perspectives 25, no. 1 (Winter 2011): 159-84.
54. Philip Oreopoulos and Kjell G. Salvanes, "Priceless: The Nonpecuniary Benefits of Schooling, " Journal of Economic Perspectives 25, no. 1 (Winter 2011): 159-84.
55. Fabian Lange and Robert Topel, "The Social Value of Education and Human Capital, " in Handbook of the Economics of Education, volume 1, edited by Eric A. Hanushek and Finis Welch (Elsevier, 2006), pp. 459-509.
56. John Bound and Sarah E. Turner, "Dropouts and Diplomas: The Divergence in Collegiate Outcomes, " in Handbook of the Economics of Education, volume 4, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann (Elsevier, 2011), pp. 573-613.
57. Thomas J. Kane and Cecilia Elena Rouse, "Labor-Market Returns to Two-and Four-Year College, " American Economic Review 85, no. 3 (1995): 600-14.
58. John Bound and Sarah E. Turner, "Dropouts and Diplomas: The Divergence in Collegiate Outcomes, " in Handbook of the Economics of Education, volume 4, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann (Elsevier, 2011), pp. 573-613.
59. Fabian Lange and Robert Topel, "The Social Value of Education and Human Capital, " in Handbook of the Economics of Education, volume 1, edited by Eric A. Hanushek and Finis Welch (Elsevier, 2006), pp. 459-509.
60. Todd R. Stinebrickner and Ralph Stinebrickner, "Learning about Academic Ability and the College Drop-out Decision, " Working Paper 14810 (Cambridge, Mass.: National Bureau of Economic Research, March 2009).
61. Sarah E. Turner, "Going to College and Finishing College: Explaining Different Educational Outcomes, " in College Choices: The Economics of Where to Go, When to Go, and How to Pay for It, edited by Caroline M. Hoxby (University of Chicago Press, 2004), pp. 13-61.
62. John Bound and Sarah E. Turner, "Dropouts and Diplomas: The Divergence in Collegiate Outcomes, " in Handbook of the Economics of Education, volume 4, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann (Elsevier, 2011), pp. 573-613.
63. John Bound, Michael F. Lovenheim, and Sarah Turner, "Increasing Time to Baccalaureate Degree in the United States, " Working Paper 15892 (Cambridge, Mass.: National Bureau of Economic Research, April 2010).
64. John Bound and Sarah E. Turner, "Cohort Crowding: How Resources Affect Collegiate Attainment, " Journal of Public Economics 91, no. 5-6 (2007): 877-99.
65. John Bound, Michael Lovenheim, and Sarah E. Turner, "Understanding the Decrease in College Completion Rates and the Increased Time to the Baccalaureate Degree, " report prepared for the Population Studies Center (University of Michigan Institute for Social Research, November 2007).
66. Stacey Berg Dale and Alan B. Krueger, "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables, " Quarterly Journal of Economics (November 2002): 1491-527.
67. John Bound and Sarah E. Turner, "Dropouts and Diplomas: The Divergence in Collegiate Outcomes, " in Handbook of the Economics of Education, volume 4, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann (Elsevier, 2011), pp. 573-613.
68. For a recent analysis on earnings differences by institutional quality see Mark Hoekstra, "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Base Approach, " Review of Economics and Statistics 91 no. 4 (2009): 717-24.
69. College Board, Advocacy and Policy Center, 2011, "Trends in College Pricing" (http://trends.collegeboard. org/downloads/College_Pricing_2011.pdf).
70. College Board, Advocacy and Policy Center, 2011, "Trends in College Pricing, " figure 2.
71. For a more complete discussion of the information problems associated with college costs, see Judith Scott-Clayton, "Information Constraints and Financial Aid Policy, " Working Paper 17811 (Cambridge, Mass.: National Bureau of Economic Research, February 2012).
72. Sandy Baum and Saul Schwartz, "Is College Affordable? In Search of a Meaningful Definition" (Institute for Higher Education Policy, 2012).
73. College Board, Advocacy and Policy Center, October 2011, "Trends in College Pricing, " figure 7.
74. Anthony P. Carnevale and Stephen J. Rose, "The Undereducated American, " report prepared for the Center on Education and the Workforce (Georgetown University, 2011).
75. Christopher Avery and Sarah E. Turner, "Student Loans: Do College Students Borrow Too Much-Or Not Enough?" Journal of Economic Perspectives 26, no. 1 (2012): 165-92.