Findings

Back-to-School Edition

Kevin Lewis

September 29, 2009

Prep School and Public School Graduates: Who Attends College Reunions, Who Donates, Who Doesn't, and Why

Richard Zweigenhaft
Sociological Spectrum, November 2009, Pages 742-750

Abstract:
As early as the 1920s, studies at various elite colleges revealed that public school graduates outperformed private school graduates academically, and more recent research indicates various differences in life patterns between these two groups 25 years after graduation. The two new studies presented here, which look at attendance at college reunions and donations to one's college, extend that earlier work. At a New England college, public school graduates were more likely than the private school graduates to attend their 30th, 35th, and 40th year college reunions. Donations to the school showed that public school graduates were somewhat more likely to make contributions than private school graduates, and graduates of the most socially elite boarding schools were especially unlikely to have made contributions. These findings are discussed in terms of the varying roles that prep schools and colleges play in one's identity.

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Beauty vs. Brains: Early Labor Market Outcomes of High School Graduates

Jason Fletcher
Economics Letters, forthcoming

Abstract:
This paper examines the wage returns to attractiveness for young high school graduates. Findings show that wage returns to attractiveness are large relative to ability and beauty and ability are complements at high attractiveness ratings but substitutes at low ratings.

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The Rug Rat Race

Garey Ramey & Valerie Ramey
NBER Working Paper, August 2009

Abstract:
After three decades of decline, the amount of time spent by parents on childcare in the U.S. began to rise dramatically in the mid-1990s. Moreover, the rise in childcare time was particularly pronounced among college-educated parents. Why would highly educated parents increase the amount of time they allocate to childcare at the same time that their own market returns have skyrocketed? After finding no empirical support for standard explanations, such as selection or income effects, we offer a new explanation. We argue that increased competition for college admissions may be an important source of these trends. The number of college-bound students has surged in recent years, coincident with the rise in time spent on childcare. The resulting "cohort crowding" has led parents to compete more aggressively for college slots by spending increasing amounts of time on college preparation. Our theoretical model shows that, since college-educated parents have a comparative advantage in college preparation, rivalry leads them to increase preparation time by a greater amount than less-educated parents. We provide empirical support for our explanation with a comparison of trends between the U.S. and Canada, and a comparison across racial groups in the U.S.

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Education and the Reproduction of Economic Inequality in the United States: An Empirical Investigation

Russell Rumberger
Economics of Education Review, forthcoming

Abstract:
This study investigates the relationship between family background and both college completion and earnings for a cohort of young adults. The study is based on sample of 8,901 respondents from the National Education Longitudinal Study who were first surveyed as eighth graders in 1988 and last surveyed 12 years later and who were working and not attending school at the time of the last survey. The study finds that social class background has a powerful effect on college completion. The odds of completing college for a student from a high SES background are more than six times higher than for a student from a lower social class background, even when controlling for other predictors such as test scores, grades, and college expectations. The effect of social class background on young adult earnings is more modest, but consistent with other studies. In both cases, the relationships varies widely among gender and racial and ethnic groups.

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Financial Literacy among the Young: Evidence and Implications for Consumer Policy

Annamaria Lusardi, Olivia Mitchell & Vilsa Curto
NBER Working Paper, September 2009

Abstract:
We examined financial literacy among the young using data from the 1997 National Longitudinal Survey of Youth. We showed that financial literacy is low among the young; fewer than one-third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy. These findings have implications for consumer policy.

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The Relations between Race, Family Characteristics, and Where Students Apply to College

Brian An
Social Science Research, forthcoming

Abstract:
This paper examines the impact of race, family background, and parental investments on a behavioral manifestation of educational expectations: where students apply to college. Submitting an application to colleges is an important step in the transition to college because the majority of four-year colleges require students to apply before enrolling. This paper documents the effects of social origins on the selectivity of where high school seniors applied, based on a national sample from the class of 2004. The results show general support for the contention that social background and parental investments influence where students apply to college. Minority students are more likely to apply to selective colleges than comparable white students. Parental education is positively associated with the selectivity of the college to which students apply. Family structure and sibship size, however, are not associated with applying to a selective college. Parental economic and interactional investments are also associated with where students apply to college. I further examine the interplay between family background and race and find that family background exerts a uniform influence on where students apply irrespective of race and ethnic origin.

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Playing the Admissions Game: Student Reactions to Increasing College Competition

John Bound, Brad Hershbein & Bridget Terry Long
NBER Working Paper, August 2009

Abstract:
Gaining entrance to a four-year college or university, particularly a selective institution, has become increasingly competitive over the last several decades. We document this phenomenon and show how it has varied across different parts of the student ability distribution and across region, with the most pronounced increases in competition being found among higher-ability students and in the Northeast. Additionally, we explore how the college preparatory behavior of high school seniors has changed in response to the growth in competition. We also discuss the theoretical implications of increased competition on longer-term measures of learning and achievement and attempt to test them empirically; the evidence and related literature, while limited, suggests little long-term benefit.

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Skipping Class in College and Exam Performance: Evidence from a Regression Discontinuity Classroom Experiment

Carlos Dobkin, Ricard Gil & Justin Marion
Economics of Education Review, forthcoming

Abstract:
In this paper we estimate the effect of class attendance on exam performance by implementing a policy in three large economics classes that required students scoring below the median on the midterm exam to attend class. This policy generated a large discontinuity in the rate of post-midterm attendance at the median of the midterm score. We estimate that near the policy threshold, the post-midterm attendance rate was 36 percentage points higher for those students facing compulsory attendance. The discontinuous attendance policy is also associated with a significant difference in performance on the final exam. We estimate that a 10 percentage point increase in a student's overall attendance rate results in a 0.17 standard deviation increase in the final exam score without adversely affecting performance on other classes taken concurrently.

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How large are returns to schooling? Hint: Money isn't everything

Philip Oreopoulos & Kjell Salvanes
NBER Working Paper, September 2009

Abstract:
This paper explores the many avenues by which schooling affects lifetime well-being. Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects the degree one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision making skills that more schooling would help improve.

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The Price of Admission: Who Gets into Private School and How Much Do They Pay?

Nina Walton
University of Southern California Working Paper, April 2009

Abstract:
This paper uses mechanism design theory to analyze how elementary and secondary private schools decide which students to admit from their applicant pool when wealth is private information. The problem for an individual private school of who to admit and how much to charge in tuition, is complicated by the existence of peer-effects: the value students place on attending school is increasing with the average ability of the entire class at that school. This feature, coupled with the fact that students can always attend public school for free, places constraints on the types of classes the private school can admit. An incentive compatible allocation rule which admits only high ability students violates the private school's operating constraint, while an allocation rule which admits only on the basis of wealth violates student participation constraints. Recognizing the costs associated with verifying wealth type can assist in explaining the structure of tuition contracts between students and private schools.

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Interpreting Degree Effects in the Returns to Education

Alfonso Flores-Lagunes & Audrey Light
Ohio State University Working Paper, August 2008

Abstract:
Researchers often identify degree effects by including degree attainment (D) and years of schooling (S) in a wage model, yet the source of independent variation in these measures is not well understood. We argue that S is negatively correlated with ability among degree-holders because the most able graduate the fastest, but positively correlated among dropouts because the most able benefit from increased schooling. Using NLSY79 data, we find support for this argument; our findings also suggest that highest grade completed is the preferred measure of S for dropouts, while age at school exit is a more informative measure for degree-holders.


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