2025 Theses Doctoral

Managers, Markets, and Money: Essays on the Economics of Higher Education

Acevedo, Nicolas

This dissertation explores the organizational and market mechanisms that influence student success in higher education, beyond student access to financial and support resources. This work finds that factors such as leadership compensation, quality and characteristics, the structure of outside labor markets, competitive pressures, and the structure of financial aid mediate student outcomes. These results suggest that a successful higher education policy needs to take into account how institutional governance, market forces interact with existing student support policies to ensure that public and institutional incentives are aligned in ensuring an efficient use of resources.

The first chapter focuses on how college presidents' compensation responds to taxation, and how their behavior changes in turn. I use a provision of the 2017 Tax Cuts and Jobs Act, which introduced a 21% excise tax on nonprofit compensation above a $1 million threshold, which applied to private nonprofit college presidents and increased the cost to institutions of their total compensation. I use an event study design to estimate the effect of this tax on presidential compensation, finding that presidential compensation fell by 26% and their probability of exit increased by 19%. Presidents adapted their behavior in response to this drop in compensation by prioritizing easily observable financial outcomes instead of student expenditure and success, increasing net income by 30% and investment returns by 23%, while the most taxed presidents decreased student net financial aid by 0.56% per additional 1% of their tax burden. The impact of the TCJA also varies by president demographics: female presidents' compensation decreases were twice as large as those found for their male counterparts. I also find that the returns to experience are substantial, as presidents coming from the private sector or government underperform their counterparts with higher education experience.

The second chapter, joint with Stephanie Riegg Cellini and Kathryn Blanchard, explores institutional responses to changes in the labor market faced by their graduates in a particular context. In the United States, licenses are required for entry into many different occupations. Requirements vary by state and occupation, but many licenses require a minimum number of training or instructional hours. We consider the impact of these hours requirements on students and postsecondary institutions, with a particular focus on cosmetology (also known as hairstyling or beauty), the field that requires the highest number of training hours in the largest number of states. We implement a difference-in-difference design based on state-level changes in licensing hours for cosmetologists between 2011 and 2019. We ask how and whether changes to hours requirements influence student outcomes and institutional behavior. We find that lowering required hours is likely beneficial for students as it increases completion, lowers tuition, and expands enrollment among some groups of students. Larger institutions appear to reduce their tuition by less than smaller institutions. We find no detectable effects on student debt or cosmetologist earnings.

The third chapter explores the effects and limits of emergency financial aid based on direct transfers to students. In this paper, I evaluate the impacts of an emergency financial aid program on short-term academic outcomes in the context of the Covid-19 pandemic. Using administrative data from a large public college system, I estimate a regression discontinuity model leveraging the assignment rule for additional funding based on expected economic need to evaluate the effects of marginal increases in aid. The regression discontinuity model finds no significant academic impacts of marginal increases in grant aid, consistent with similar results in the literature.