Collegiate attainment: Understanding degree completion (2010)

Collegiate attainment has not kept pace with increases in the for skilled workers in the United States. The widely-noted increase in the wage premium to college completion since the 1970s has led to a substantial expansion in the number of students attending college, although the number of students completing college has not increased commensurately. (1) In fact, among those aged 25-34, the share of high school graduates who had enrolled in college increased from just under 50 percent to over 68 percent between 1975 and 2009, while the percent of those enrolled who completed a four-year degree actually fell slightly, from 54.7 percent to 53.2 percent. (2) Moreover, students who do complete degrees now do so at a slower rate than those in earlier generations. (3) While overall college completion rates have stagnated, gaps in collegiate attainment by parental circumstances actually have widened, with the persistently low college graduation rate among low-income students contributing to the stagnation in the growth of the of college-educated workers in recent decades. (4) Moreover, changes in degree attainment have not been uniform across different types of colleges and universities. College completion rates have declined, and time to degree has increased most markedly, among students beginning their studies at community colleges and public institutions outside the most selective flagship universities. Broadly speaking, collegiate attainment is determined by the interaction of student attributes (the demand side) and institutional characteristics (the supply side). Our analyses consider how these different factors affect degree completion and time to degree receipt. Both student characteristics and institutional resources play a substantial role in the determination of these college outcomes. Evidence on Determinants of Degree Attainment On the demand-side, the pre-collegiate preparation of potential college students often is cited as one of the most significant barriers to degree completion. Given substantial increases in college going, one might hypothesize that if students with weaker preparation were induced to attend college, they would finish college at a lower rate and a slower pace, and it is probable that a lower proportion of students would finish college. Using data from two longitudinal surveys--the National Longitudinal Survey of the High School Class of 1972 (NLS72) and the National Educational Longitudinal Study (NELS: 88)--to measure degree attainment, we find that students with relatively low academic achievement in both cohorts are unlikely to complete the BA degree. (5) There is no question that the cross-cohort increase in the share of students with weak preparation affected the aggregate college completion rate; we estimate that about one third of the cross-cohort decline in completion rates can be explained by the change in student preparation. (6) While models of educational attainment typically consider a perfectly elastic side of the education market, evidence of substantial stratification in degree outcomes and resources has motivated us to consider the distribution of resources as a way of explaining changes in degree attainment. In the United States, there is considerable (and increasing) stratification in the level of resources provided by colleges and universities, and many of these resources come from public and private subsidies beyond tuition. (7) Limited changes in enrollment in response to increased demand, particularly at the most selective and resource-intensive colleges and universities, demonstrate that the supply-side of the higher education market is not perfectly elastic. (8) Substantial differences in institutional resources by broad type of institution--distinguishing institutions by selectivity, public control, and two-year versus four-year degree programs--are closely coupled with differences in college completion rates. …