Are Some Degrees Worth More than Others? Evidence from College Admission Cutoffs in Chile

50 Pages Posted: 19 Jul 2013

See all articles by Justine S. Hastings

Justine S. Hastings

Brown University; National Bureau of Economic Research (NBER)

Chris Neilson

Yale University - Department of Economics

Seth D. Zimmerman

Yale University; University of Chicago - Booth School of Business

Date Written: July 2013

Abstract

Understanding how returns to higher education vary across degree programs is critical for effective higher education policy. Yet there is little evidence as to whether all degrees improve labor market outcomes, and whether they do so for students from different types of backgrounds. We combine administrative and archival data from Chile with score-based admissions rules at more than 1,100 degree programs to study how the long-run earnings effects of college admission depend on selectivity, field of study, and student characteristics. Our data link admissions outcomes for 30 cohorts of college applicants to administrative records of labor market outcomes up to 30 years post-application. We estimate regression discontinuity specifications for each degree, and describe how threshold-crossing effects vary by degree type. In addition, we use variation in admissions outcomes driven by threshold-crossing to estimate a simple model that maps our discontinuity estimates into causal effects of admission by degree. Observed choice and survey data indicate that the assumptions underlying this model are consistent with student behavior. We find that returns are heterogeneous, with large, positive returns to highly selective degrees and degrees in health, science, and social science fields. Returns to selectivity do not vary by student socioeconomic status. Our findings suggest a role for policies that guide students toward higher-return degrees, such as targeted loans and better college preparation for students from low-income backgrounds.

Suggested Citation

Hastings, Justine and Neilson, Chris and Zimmerman, Seth D., Are Some Degrees Worth More than Others? Evidence from College Admission Cutoffs in Chile (July 2013). NBER Working Paper No. w19241, Available at SSRN: https://ssrn.com/abstract=2295855

Justine Hastings (Contact Author)

Brown University ( email )

Box 1860
Providence, RI 02912
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chris Neilson

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Seth D. Zimmerman

Yale University ( email )

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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