The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We estimate the returns to college using administrative data on college enrollment matched to administrative data on weekly earnings. Utilizing the fact that colleges dismiss lowperforming students based on exact GPA cutoffs, we use a regression discontinuity design to estimate the earnings impacts of college. Dismissed students are permitted to apply for readmission, but since relatively few do so, these students end up completing fewer years of school and are approximately 10 percentage points less likely to graduate college. Our estimates suggest that low-performing students (on the margin of college dismissal) derive substantial earnings benefits from college.JEL Classification: I21, I23, I26

The consequences of academic dismissal for academic success

“…These results are qualitatively different from emerging evidence on academic probation and dismissal in other contexts (mostly North America), which point to generally negative implications concerning retention and graduation (Lindo, Sanders, and Oreopoulos 2010;Ost, Pan, and Webber 2018). The results found in these studies tend to confirm two of the predictions of the Benabou and Tirole (2000) model of performance standard in which academic dismissal would generate both a discouragement effect (students dropout from higher education) and an encouragement effect (increased performance of re-enrolling students).…”

“…While such academic dismissal at the end of the first year is similar to polices observed in other countries, a notable difference with other systems is thatfor example in Canada and the United Statesthese systems are often based on grade point average (GPA) instead of credits. These policies are then often also accompanied by a system of academic counseling, probation and/or suspension, as to improve GPA and avoid ultimate dismissal (Lindo, Sanders, and Oreopoulos 2010;Ost, Pan, and Webber 2018). Furthermore, whereas academic dismissal in the Netherlands pertains to a particular program only, similar policies in other countries often apply to enrollment at a specific higher education institution.…”

Maxed Out?

“…Our setting resembles those of Zimmerman (2014) and Ost, Pan, and Webber (2018), in which there is bunching in the running variable; in our setting, the bunching is in completed credits, while in their settings it is in GPA. In both of these cases-as in our case-observable student characteristics do not change at the threshold.…”

The Remarkable Unresponsiveness of College Students to Nudging And What We Can Learn from It

“…Even against the current backdrop of low completion rates and study effort, estimates of the average return to college remain significantly positive, including for students at the margin of admission (Oreopoulos and Petronijevic, 2013;Zimmerman, 2014;Ost et al, 2018). How well the investment pays off, however, depends on many factors, including financial cost (Lochner and Monge-Naranjo, 2012), incoming ability , college and teaching quality (Chetty et al, 2017;Hoxby and Stange, forthcoming), and field of study (Kirkeboen et al 2016).…”