Search Results
Journal Article
The Unequal Responses to Pandemic-Induced Schooling Shocks
This article investigates the existence of socio-demographic gradients in the schooling shocks experienced by school-aged children and their ability to adjust to the disruptions induced by the containment measures imposed in response to the COVID-19 pandemic. It focuses on documenting racial, educational, and income disparities in these two essential components of children's human capital accumulation that could have significant implications in the medium and long run. The article finds that children in households from disadvantaged socio-demographic groups (i) were significantly more likely ...
Journal Article
The Changing Role of Family Income in College Selection and Beyond
Previous literature has established that the role of family income has grown substantially at predicting college entry decisions when comparing the 1979 and 1997 National Longitudinal Surveys of Youth (e.g., Belley and Lochner (2007)). In this article, I further examine the changing role of family income as a determinant of college quality choice, degree attainment, and post-schooling earnings. I document that the role of family income has remained important and relatively stable at explaining college quality choice, its importance increasing only for the choice of four- over two-year ...
Working Paper
Explaining Cross-Cohort Differences in Life Cycle Earnings
College-educated workers entering the labor market in 1940 experienced a 4-fold increase in their labor earnings between the ages of 25 and 55; in contrast, the increase was 2.6-fold for those entering the market in 1980. For workers without a college education these figures are 3.6-fold and 1.5-fold, respectively. Why are earnings profiles flatter for recent cohorts? We build a parsimonious model of schooling and human capital accumulation on the job and calibrate it to earnings statistics of workers from the 1940 cohort. The model accounts for 99 percent of the flattening of earnings ...
Working Paper
Causes and Consequences of Student-College Mismatch
College admissions are highly meritocratic in the U.S. today. It is not the case in many other countries. What is the tradeoff? On one hand, meritocracy produces more human capital overall if higher ability students learn more in college and if they learn more in higher quality colleges. This leads to a higher overall level of earnings (i.e. greater efficiency, loosely speaking). On the other hand, more meritocracy generates a higher degree of earnings inequality. In this paper, we quantify this efficiency-equality tradeoff. Our results suggest small efficiency losses/gains from student ...
Working Paper
Institution, Major, and Firm-Specific Premia: Evidence from Administrative Data
We examine how a student's field of degree and institution attended contribute to the labor market outcomes of young graduates. Administrative panel data that combines student transcripts with matched employer-employee records allow us to provide the first decomposition of premia into individual and firm-specific components. We find that both major and institutional premia are more strongly related to the firm-specific component of wages than the individual-specific component of wages. On average, a student's major is a more important predictor of future wages than the selectivity of the ...
Discussion Paper
Modern Income-Share Agreements in Postsecondary Education: Features, Theory, Applications
An income-share agreement (ISA) in postsecondary education is a contract in which students pledge to pay a certain percentage of their future incomes over a set period of time in exchange for funding educational program expenses in the present. Typically, participants begin to make payments once their incomes rise above a minimum threshold set by the terms of the ISA and will never pay more than a set cap (usually, a multiple of the original amount). Funding for ISAs can range from university sources to philanthropic funding and private investor capital. In this study, we describe the many ...
Working Paper
Is It Still an Econ Course? The Effect of a Standardized Personal Finance Test on the Learning of Economics
We study the implications of mixing economics and personal finance standardsin a high school course. Using administrative, survey, and testing data on collegestudents, we find evidence that personal finance instruction crowds out economicsinstruction. We find that students who received more instruction in economics scorealmost 5% higher on an economics test. Furthermore, we estimate the effect of beingassigned a certification test in personal finance as a part of this course. The effect ofthe certification test is not uniform across students. The test reduces the economicsscores of students ...
Working Paper
College Access and Intergenerational Mobility
This paper studies how college admissions preferences for low income students affect intergenerational earnings mobility. We develop a quantitative model of college choice with quality differentiated colleges. We find that admissions preferences substantially increase low income enrollment in top quality colleges and intergenerational earnings mobility. The associated losses of aggregate earnings are very small.
Working Paper
On Expanding Public Funding of Selective Colleges
As college attainment expanded in the U.S., the fraction of public funds allocated to selective colleges and universities declined. Does this make sense from an efficiency standpoint, given that the majority of college entrants face the highest financial returns at selective colleges? Should the states instead be expanding access to high quality colleges? In this paper, we examine reallocating public funds from low quality to high quality colleges in a spending-neutral way. We find that this policy leads to a decline in aggregate earnings and intergenerational income mobility. Public spending ...