Non-Traditional Postsecondary Pathways, Quality Signals, and Labor Market Returns

Session Submission Type: Panel

Abstract

As policymakers seek to expand postsecondary opportunity beyond traditional four-year pathways, they face a central question: which alternatives improve economic opportunity, and for whom? This panel brings together four papers on for-profit versus public colleges, community college bachelor’s degrees, licensing and reputation effects from quality regulation, and the returns to and option value of high-demand majors. Together, they show how institutional structure and college quality shape outcomes.

The first paper (Haygood) asks whether higher completion rates at two-year for-profit colleges reflect a more effective pathway or lower academic standards. Combining national survey and administrative earnings data, Haygood finds a sizable for-profit completion premium, especially for academically weaker students. Transcript evidence suggests that this advantage may be driven partly by less demanding coursework and higher grades. Still, because lower-ability students are much less likely to complete degrees in the public sector, for-profits may offer comparable returns for some students.

The second paper (Acton ⓡ Morales ⓡ Turner ⓡ Miller ⓡ Cortes) examines the labor market value of community college baccalaureate (CCB) degrees, a growing alternative to the traditional transfer pathway. Using a resume audit study, the authors vary degree type, institution attended, and applicant race and ethnicity in fictitious applications. Pilot results from early childhood education markets in Dallas and Seattle show that employers view CCB degrees comparably to both traditional bachelor’s degrees and associate degrees, suggesting that CCBs may offer an accessible route to a bachelor’s credential without employer penalties.

The third paper (Alba-Vivar, Flor-Toro, and Magnaricotte) examines how public quality signals affect the labor market value of college credentials. Studying Peru’s 2015 higher education reform, the authors isolate the signaling effect of positive news about recent graduates’ human capital. They find that positive licensing signals increase wages, especially for recent graduates with limited work history, and improve access to large firms and public sector jobs. They highlight the importance of employer information in the returns to postsecondary pathways.

The fourth paper (Altonji and Zhu) focuses on the returns to major choice within postsecondary institutions, estimating the earnings effects of business and engineering majors and the extent to which those returns reflect the option value of graduate school. Using GPA cutoffs for internal transfer and a fuzzy regression discontinuity design, the authors find substantial earnings gains from both majors, especially engineering. They also show that graduate school options account for a much larger share of value gains for business majors than for engineering majors. The results show that postsecondary returns depend not only on degree attainment, but also on how fields of study shape future opportunities.

Taken together, these papers advance a broader conversation about non-traditional aspects of the returns to postsecondary pathways. They show that expanding access is not just about getting more students into college, but about understanding how new credentials, sectors, quality signals, and fields of study shape labor market trajectories. The panel offers new insight into when pathways broaden opportunity, when they may reproduce inequality, and how policy can better align postsecondary options with long-run mobility.

Policy Area

• Education

Chair

• XunFei Li, University of California, Irvine

Discussants

• Michael Lovenheim, Cornell University

• Stephanie Riegg Cellini, George Washington University

Organizer

• Lois Miller, University of South Carolina

Individual Presentations

• Academic Match and the Returns to For-Profit and Public Colleges - Presenting Author: Ryan Haygood, Yale University

• Estimating the Value of a New Postsecondary Credential: An Audit Study of Community College Bachelor’s Degrees - Presenting Author: Lois Miller, University of South Carolina

• College Licensing and Reputation Effects on the Labor Market - Presenting Author: Matteo Magnaricotte, The University of Chicago; Non-Presenting Co-Author: Fabiola Monica Alba Vivar, Wake Forest University

• Returns to and Option Values of Majoring in Business and Engineering - Presenting Author: Zhengren Zhu, Vassar College