The Labor Market Returns to a For-Profit College Education

43 Pages Posted: 18 Jul 2012

See all articles by Latika Chaudhary

Latika Chaudhary

Naval Postgraduate School

Stephanie Riegg Cellini

George Washington University - School of Public Policy and Public Administration (SPPPA)

Multiple version iconThere are 2 versions of this paper

Date Written: June 17, 2012

Abstract

A lengthy literature estimating the returns to education has largely ignored the for-profit sector. In this paper, we offer some of the first causal estimates of the earnings gains to for-profit colleges. We rely on restricted-use data from the 1997 National Longitudinal Survey of Youth (NLSY97) to implement an individual fixed effects estimation strategy that allows us to control for time-invariant unobservable characteristics of students. We find that students who enroll in associate’s degree programs in for-profit colleges experience earnings gains between 6 and 8 percent, although a 95 percent confidence interval suggests a range from -2.7 to 17.6 percent. These gains cannot be shown to be different from those of students in public community colleges. Students who complete associate’s degrees in for-profit institutions earn around 22 percent, or 11 percent per year, and we find some evidence that this figure is higher than the returns experienced by public sector graduates. Our findings suggest that degree completion is an important determinant of for-profit quality and student success.

Keywords: returns to education, for-profit college, community college, NLSY, earnings

JEL Classification: I2, I20, I23, J01, J24

Suggested Citation

Chaudhary, Latika and Cellini, Stephanie Riegg R., The Labor Market Returns to a For-Profit College Education (June 17, 2012). Available at SSRN: https://ssrn.com/abstract=2111598 or http://dx.doi.org/10.2139/ssrn.2111598

Latika Chaudhary (Contact Author)

Naval Postgraduate School ( email )

1 University Circle
Monterey, CA 93043
United States

Stephanie Riegg R. Cellini

George Washington University - School of Public Policy and Public Administration (SPPPA) ( email )

805 21st Street, NW
Media and Public Affairs Building, Room 602
Washington, DC 20052
United States

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