The Returns to a Large Community College Program: Evidence from Admissions Lotteries

Abstract

This paper estimates the labor market returns to the associate’s degree in nursing (ADN), which is one of the most popular community college programs. I use student-level academic and earnings records across two decades for all community college students in California. I leverage random variation from admissions lotteries to produce causal estimates of the effect of the ADN on earnings and employment at a single large ADN program. Enrolling in the program increases earnings by 44 percent and the probability of working in the health care industry by 19 percentage points. These estimates are similar to ones in models that do not use the lottery variation but do control for individual fixed effects and individual-specific linear time trends, which I also estimate in a wider set of institutions where lottery estimates are not possible. In light of concerns about nursing shortages, I estimate that the economic benefit of expanding an ADN program by one seat far outweighs the costs. (JEL D44, I11, I23, I26, J24, J31)

Minimum Wage Policy and Community College Enrollment Patterns

“…Neumark et al (2004) suggested that a minimum wage increase affects the wage rates of the individuals earning up to 150% of the minimum wage. Although substantial benefits are associated with community college education (Kane and Rouse 1995, 1999; Belfield and Bailey 2011; Jepsen, Troske, and Coomes 2014; Grosz 2018; Stevens, Kurlaender, and Grosz 2019), a minimum wage increase offers a non-negligible earnings increase and provides additional work experience. Kane and Rouse (1995) estimated a 4 to 7% increase in earnings for each year at a community college.…”

“…Jepsen et al (2014) found a 20% increase in earnings for men with a community college degree and a nearly 50% increase for women. Grosz (2018) and Stevens et al (2019) found a substantial earnings increase associated with nursing programs and career technical education at community colleges. Together, these findings imply that the individuals considering enrollment at a community college may respond to a minimum wage increase with greater effort in the labor market.…”

Do Dutch dentists extract monopoly rents?

“…1,2 Our paper also contributes to the recently emerging literature that examines payoffs to specific fields of study (e.g. Hastings et al, 2013;Grosz, 2016;Ketel et al, 2016 andKirkebøen et al, 2016; see also: Altonji et al, 2012Altonji et al, , 2015. Most related is our previous paper (Ketel et al, 2016) where we use admission lotteries to estimate the financial payoffs to completing medical school in the Netherlands.…”

Workforce Entry Including Career and Technical Education and Training

“…A final nonexperimental literature builds on the pioneering study of Jacobson, LaLonde, and Sullivan (2005). Recent examples include Jepsen, Troske, and Coomes (2014); Grosz (2020); and Leung and Pei (2020). The papers in this literature typically use state administrative data on earnings and other labor market outcomes drawn from unemployment insurance records combined with administrative data on enrollment, course of study, and degree and certificate completion from public two-year (and sometimes four-year) colleges.…”