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PreprintCited by 41Higher Education Research StudiesSchool Choice and PerformanceIntergenerational and Educational Inequality Studies

The Returns to College(s): Relative Value-Added and Match Effects in Higher Education

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Mountjoy, Jack, Hickman, Brent·2020·SSRN Electronic Journal
DOI 10.2139/ssrn.3537773
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Abstract

Students who attend different colleges in the U.S. end up with vastly different economic outcomes. We study the role of relative value-added across colleges within student choice sets in producing these outcome disparities. Linking administrative high school records, college applications, admissions decisions, enrollment spells, degree completions, and quarterly earnings spanning the Texas population, we identify relative college value-added by comparing the outcomes of students who apply to and are admitted by the same set of institutions, as this approach strikingly balances observable student potential across college treatments and renders our extensive set of covariates irrelevant as controls. Methodologically, we develop a framework for identifying and interpreting value-added under varying assumptions about match effects and sorting gains, generalizing the constant treatment effects assumption typically employed in the value-added literature. Empirically, we estimate a relatively tight, though non-degenerate, distribution of relative value-added across the wide diversity of Texas public universities. Selectivity poorly predicts value-added within student choice sets: a fleeting selectivity earnings premium fades to zero after a few years in the labor market, and more selective colleges tend to have lower value-added on STEM degree completion. Non-peer college inputs like instructional spending more strongly predict value-added, especially conditional on selectivity. Educational impacts predict labor market impacts: colleges with larger earnings value-added also tend to be colleges that boost persistence, BA completion, and STEM degrees along the way. Finally, we probe the potential for (mis)match effects by allowing each college's relative value-added to vary flexibly by student characteristics. At first glance, Black students appear to face small negative returns to choosing more selective colleges, but this pattern of modest "mismatch" is entirely driven by the availability of two large historically Black universities with low selectivity but above-average value-added. Across the non-HBCUs, Black students face similar returns to selectivity, and indistinguishable value-added schedules more generally, compared to their peers from other backgrounds.

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Cited by

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Authors
Mountjoy, J., & Hickman, B.
Affiliations
  • National Bureau of Economic Research (US)
  • Washington University in St. Louis (US)
Venue
SSRN Electronic Journal
Publisher
Elsevier BV
Published
2020
ISSN
1556-5068 (ISSN-L)
DOI
10.2139/ssrn.3537773
OpenAlex
W4237261954
Cited by
41
References
6
Citations by year
2025: 3 · 2024: 2 · 2023: 11 · 2022: 13 · 2021: 5 · 2020: 7
Type
posted content
Language
en
Open access
Locations
  • SSRN Electronic Journal (acceptedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
  • Texas Education Agency
  • Princeton University
  • Booth School of Business, University of Chicago
Topics
  • Social Sciences › Education › Higher Education Research Studies
  • Social Sciences › Education › School Choice and Performance
  • Social Sciences › Sociology and Political Science › Intergenerational and Educational Inequality Studies
Keywords
college selectivity, graduation, STEM degree completion, student persistence, historically Black colleges and universities, Black students, university admission, Texas public universities, returns to education

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