The returns to college persistence for marginal students: Regression discontinuity evidence from university dismissal policies

We estimate the returns to college using administrative data on both college enrollment and earnings. Exploiting that colleges dismiss low-performing students on the basis of exact GPA cutoffs, we use a regression discontinuity design to estimate the earnings impacts of college. Dismissal leads to a...

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Bibliographic Details
Published in:Journal of labor economics 2018-07, Vol.36 (3), p.779-805
Main Authors: Ost, Ben, Pan, Weixiang, Webber, Douglas A
Format: Article
Language:English
Subjects:
Abbruch
Bildungsertrag
College
College students
Discontinuity
Dismissal
Earnings
Education policy
Enrollments
Labor economics
Manipulation
Ohio
Rates of return
Regression analysis
Savings
Student
Studies
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Summary:We estimate the returns to college using administrative data on both college enrollment and earnings. Exploiting that colleges dismiss low-performing students on the basis of exact GPA cutoffs, we use a regression discontinuity design to estimate the earnings impacts of college. Dismissal leads to a short-run increase in earnings and tuition savings, but the future fall in earnings is sufficiently large that 8 years after dismissal, persisting students have already recouped their upfront investment with an internal rate of return of 4.1%. We provide a variety of evidence that manipulation of the running variable does not drive our results.
ISSN:0734-306X
1537-5307
DOI:10.1086/696204