Are There Returns to Attending a Private College or University?
52 Pages Posted: 28 Mar 2007
Date Written: July 26, 2006
Strains on the Federal budget have created worries that Federal funding of aid for higher education will fall in the future. If this happens, state governments will need to try to re-allocate their higher education spending more efficiently. One possible way to do this would be to shift funding away from public provision towards demand-side subsidies so that more students could attend private colleges. However, this will only work if private colleges provide benefits to students over public. Whether this is true is theoretically and empirically unclear. In order to answer this question, I use highly detailed and rich data sets to assess whether there are benefits to attending private colleges over public ones. For males the wage return is small and insignificant during their twenties but both statistically and economically significant at around 11% by the time the students reach their mid-thirties. For females I do not find any statistically significant wage returns. Attending a private school does appear to enhance future educational outcomes for both genders. In particular, the increase in likelihood of obtaining a bachelor degree is 13.5 percentage points for men and 8.9 percentage points for women.
Keywords: returns to education, higher education, public universities, private universities
JEL Classification: I20, J30, H41
Suggested Citation: Suggested Citation