Policymakers are increasingly including early-career earnings data in consumer-facing college search tools to help students and families make more informed postsecondary education decisions. We offer new evidence on the degree to which existing college-specific earnings data equip consumers with useful information by documenting the level of selection bias in the earnings metrics reported in the U.S. Department of Education’s College Scorecard. Given growing interest in reporting earnings by college and major, we focus on the degree to which earnings differences across four-year colleges and universities can be explained by differences in major composition across institutions. We estimate that more than 70 percent of the variation in median earnings across institutions is explained by observable factors, and accounting for differences in major composition explains 20-30 percent of the variation in earnings over and above institutional selectivity and student composition. We also identify large variations in the distribution of earnings within colleges; as a result, comparisons of early-career earnings can be extremely sensitive to whether the median, 25th, or 75th percentiles are presented. Taken together, our findings indicate that consumers can easily draw misleading conclusions about institutional quality when using publicly available earnings data to compare institutions.
Research on college dropout has largely addressed early exit from school, even though a large share of students who do not earn degrees leave after their second year. In this paper, we offer new evidence on the scope of college late departure. Using administrative data from Florida and Ohio, we conduct an event history analysis of the dropout process as a function of credit attainment. Our results indicate that late departure is widespread, particularly at two- and open-admission four-year institutions. We estimate that 14 percent of all entrants to college and one-third of all dropouts completed at least three-quarters of the credits that are typically required to graduate before leaving without a degree. Our results also indicate that the probability of departure spikes as students near the finish line. Amidst considerable policy attention towards improving student outcomes in college, our findings point to promising new avenues for intervention to increase postsecondary attainment.
Many college-bound students face a tradeoff between attending a more academically selective or affordable institution. We link the universe of SAT-takers with their college enrollment records and financial information thirteen years after high school to examine which of these two factors more strongly predicts early-career financial well-being. Increasing quality of academic fit is associated with stronger financial well-being in adulthood, while college affordability is negatively correlated with annual income and less positively correlated with other outcomes, even after controlling for academic fit and institutional selectivity. These findings suggest that academic fit warrants more consideration than affordability for students who attend college to improve their financial circumstances, and policies that emphasize affordability over academic fit may harm students financially in the long run.