Document Tag: ROI

Is College Worth It? (2024)

Pew Research Center conducted this study to better understand public views on the importance of
a four-year college degree. The study also explores key trends in the economic outcomes of young
adults among those who have and have not completed a four-year college degree.
The analysis in this report is based on three data sources. The labor force, earnings, hours,
household income and poverty characteristics come from the U.S. Census Bureau’s Annual Social
and Economic Supplement of the Current Population Survey. The findings on net worth are based
on the Federal Reserve’s Survey of Consumer Finances.
The data on public views on the value of a college degree was collected as part of a Center survey of
5,203 U.S. adults conducted Nov. 27 to Dec. 3, 2023. Everyone who took part in the survey is a
member of Pew Research Center’s American Trends Panel (ATP), an online survey panel that is
recruited through national, random sampling of residential addresses. Address-based sampling
ensures that nearly all U.S. adults have a chance of selection. The survey is weighted to be
representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation,
education and other categories.

Marginal Returns to Public Universities (2024)

This paper studies the causal impacts of public universities on the outcomes of their marginally admitted students. I use administrative admission records spanning all 35 public universities in Texas, which collectively enroll 10 percent of American public university students, to systematically identify and employ decentralized cutoffs in SAT/ACT scores that generate discontinuities in admission and enrollment. The typical marginally admitted student completes an additional year of education in the four-year sector, is 12 percentage points more likely to earn a bachelor’s degree, and eventually earns 5-10 percent more than their marginally rejected but otherwise identical counterpart. Marginally admitted students pay no additional tuition costs thanks to offsetting grant aid; cost-benefit calculations show internal rates of return of 19-23 percent for the marginal students themselves, 10-12 percent for society (which must pay for the additional education), and 3-4 percent for the government budget. Finally, I develop a method to disentangle separate effects for students on the extensive margin of the four-year sector versus those who would fall back to another four-year school if rejected. Substantially larger extensive margin effects drive the results.

The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies (2018)

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 up-front 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.