Paying to Earn Less? The Financial Consequences of College Non-Completion

• In Event: 4451 - Section on Sociology of Education Refereed Roundtables
  In Refereed Roundtable (60 min): Table 20: Higher Education: Challenges and Barriers

Abstract

What are the consequences of starting college, but exiting without a degree? Existing literature advises that Americans born through the 1960s could expect positive income returns to education, including increments of post-secondary training that do not lead to a credential, but given substantial demographic shifts in post-secondary enrollment and ballooning student educational costs and debt levels, we have reason to question this wisdom. New data, drawn from the NLSY97, are examined to estimate long-term financial effects for early members of Generation Y, for whom there have been substantial demographic shifts in post-secondary enrollment and ballooning student educational costs and debt levels. Both regression models and coarsened exact matching are employed to estimate effects of college non-completion “treatment” as compared to individuals who never enrolled in post-secondary training. Among members of Generation Y, some college training short of a degree is associated with modest increased income, net of other factors. However, this finding is complicated by evidence of race, class, and gender-based effect heterogeneity – and, in some cases, by evidence of decreased income. This prompts interesting research questions about the mechanisms causing such heterogeneity, while also cautioning policy makers and education practitioners about the differential financial effects of attempting but not completing a college degree.

Author

• Sarah Payne, University of California, Berkeley