Theses Doctoral

Essays on the Economics of Higher Education: The Academic and Labor Market Outcomes to Four to Two-Year Transfer, Summer Enrollment, and Year-Round Pell

Liu, Yuen Ting

As the demand for skilled labor continues to rise, the College Completion agenda has become more important than ever in our higher education discussion and policy. The agenda has created an atmosphere of support for evidence-base policies that improve completion rates and promise gainful employment. As such, my dissertation explores two potential solutions to meet the shortage of college graduates and examines the academic and labor market outcomes of students engaged in these paths. These solutions include transfer from four-year to two-year colleges and providing financial incentives for summer classes. These strategies have the potential to help students with graduation and become competitive in the job market. My dissertation also has important implications for colleges and policy makers that work with non-traditional students and especially those with financial constraints. My dissertation is structured as follows:
Chapter one explores student transfer from four-year to two-year (4–2) college and how improved academic match through transfer can benefit individuals. Facilitating student transfer from two-year to four-year institutions has been a focus of research and policy in recent years. Much less attention has been given to the phenomenon of four-year to two-year (4–2) college transfer. About 16 percent of students who begin in a four-year college transfer to a two-year college within six years. I develop a stylized model to explain how 4–2 transfer among struggling students can increase academic match and academic and labor market outcomes. Using public higher education data from one small state and using distance to the closest two-year college as an instrumental variable, this paper examines the effects of 4–2 transfer on “struggling” students, those who earned less than a 3.0 grade point average in the first term. Results indicate that these 4–2 transfer students are more likely than similar non-transfer students to attain two-year college credentials (including associate degrees and long- and short-term certificates); the gain is concentrated in women who tend to enroll in health-related programs. What is more, struggling students who transfer to two-year colleges and are sensitive to the IV are no less likely than struggling non-transfer students to earn a bachelor’s degree. Early employment outcomes also indicate that the labor market does not penalize 4–2 transfer behavior. Female 4-2 transfer students actually are more likely to be employed than other female non-transfer students. Male transfer students, however, suffer a wage penalty from transferring without ever completing a degree. Falsification tests show strong first stage results and no correlation between distance and socioeconomic indicators, which supports the use of distance as an instrumental variable for 4–2 transfer status. The findings indicate that 4–2 transfer can improve college completion for students struggling in four-year institutions.
Chapter 2 discuss an understudied solution to completion – summer enrollment. Despite rich evidence on the benefit of summer enrollment at the K-12 level, the college completion literature has so far focused on college readiness, remediation, and financial aid, and has largely overlooked the potential benefits of taking summer courses among college students. Academic momentum theory suggests that summer enrollment may increase credit accumulation and retention and thus increase the rate of college completion. Using proximity to the closest four-year college as an IV, I analyze public higher education data from an anonymous state to examine how enrolling in summer credits can impact college outcomes and the mechanisms by which it may do so. I find that summer enrollees who live closer to a four-year institution in the sample had higher bachelor’s degree completion rates than summer non-enrollees. Summer enrollees also returned to college at a higher rate and completed more credits in the following fall without compromising their grade point averages. Encouragingly, students with lower first-term grade point averages benefitted more from summer enrollment. When summer enrollees reached the labor market, they had higher employment rates six years after initial enrollment. Conditional on employment, earnings were equivalent among summer enrollees and non-enrollees. These findings indicate that summer enrollment benefits students through retention, which leads to higher rates of completion and employment. The results suggest that colleges may want to seek opportunities for increasing summer enrollment, and they have implications for the current method of Pell Grant allocation, which privileges the fall and spring terms over the summer term.
Chapter 3 answers the question of whether financial aid for the summer leads to enrollment, completion, and earnings gains. Despite being the largest source of financial aid to low-income college students, the Pell grant has one major limitation: if students enroll in two semesters full-time, they will not have any tuition support for the third semester of the same academic year. The year-round Pell (YRP) was implemented in the academic years 2009-10 and 2010-11 to provide a second Pell grant to students who enrolled in more than 24 credits prior to the third semester and in at least 6 credits during the third semester. My paper is the first to employ a difference-in-difference approach to examine the completion and labor market outcomes resulting from the YRP using a state administrative dataset from a community college system. I find that for each $1,000 of additional YRP grant funding, summer enrollment increases by 28 percentage points and associate degree completion rate increases by 2.4 percentage points, with these gains primarily benefitting adult students who enrolled at age 20 or above. Given that the federal government is considering reinstating the YRP, my research is timely in providing insight into the efficacy of the YRP.


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More About This Work

Academic Units
Economics and Education
Thesis Advisors
Bailey, Thomas
Ph.D., Columbia University
Published Here
August 5, 2017