Essays in the Economics of Labor and Higher Education
By: Evan Riehl
Publisher: [publisher not identified]
Published: 2017
Place of publication: [New York, N.Y.?]
Language: eng
Description: This dissertation examines the role of information in influencing both individuals' college outcomes and the productivity of a higher education system. It focuses in particular on large-scale educational reforms that raise different mechanisms than those in the existing literature on the returns to college attendance and college quality. Recent work has shown that the choices of whether to attend college and which college to attend can both affect individuals' future earnings. These papers typically focus on a narrow subset of students or schools to credibly identify the effects of college choice. This dissertation instead uses data on the near universe of college students in an entire country to explore informational mechanisms that are difficult to isolate in existing work. To do this, I exploit reforms to the higher education system in Colombia that affect the information on individual ability that is transmitted to colleges, to employers, or to students themselves. This allows me to adapt traditional labor economic topics like employer learning (Jovanovic, 1979) and assortative matching (Becker, 1973) to the context of higher education.

In addition, the large-scale nature of these reforms raises general equilibrium issues that may not arise from marginal changes in college admissions (e.g., Heckman, Lochner and Taber, 1998). In Chapter 1, "Assortative Matching and Complementarity in College Markets," I examine one type of assortative matching in college markets: students with high socioeconomic status (SES) are more likely to attend high quality colleges. Assortativity matters if SES and college quality are complementary educational inputs. I develop an econometric framework that provides tests for the existence and sign of this complementarity. I implement these tests by exploiting a 2000 reform of the national college admission exam in Colombia, which caused a market-wide reduction in assortative matching in some regions of the country. I find that the reform lowered average graduation rates and post-college earnings in affected regions, consistent with a positive complementarity between SES and college quality. I also find evidence of mismatch: part of these negative effects came from the low SES students who were shifted into higher quality colleges.

However, both the market-wide and mismatch effects die out several cohorts after the exam reform, which suggests that complementarity may evolve with large-scale changes in assortativity. In Chapter 2, "The Big Sort: College Reputation and Labor Market Outcomes," W. Bentley MacLeod, Juan E. Saavedra, Miguel Urquiola, and I ask how college reputation affects the process by which students choose colleges and find their first jobs. We incorporate a simple definition of college reputation---graduates' mean admission scores---into a competitive labor market model. This generates a clear prediction: if employers use reputation to set wages, then the introduction of a new measure of individual skill will decrease the return to reputation. We confirm this prediction by exploiting a natural experiment from the introduction of a college exit exam in the country of Colombia. Finally, we show that college reputation is positively correlated with graduates' earnings growth, suggesting that reputation matters beyond signaling individual skill.

Finally, in Chapter 3, "Time Gaps in Academic Careers," I ask if interruptions in students' academic careers can lower their overall schooling attainment. I study an academic calendar shift in Colombia that created a one semester time gap between high school and potential college entry. This brief gap reduced college enrollment rates relative to unaffected regions. Low SES students were more likely to forgo college, and individuals who did enroll after the gap chose higher paying majors. Thus academic time gaps can affect both the mean and the distribution of schooling attainment, with implications for the design of education systems and for wage inequality.
Notes: Department: Economics.

Thesis advisor: Miguel Urquiola.

Thesis advisor: W. Bentley MacLeod.

Thesis (Ph.D.)--Columbia University, 2017.