| Anna Chung
Indiana University
For-profit colleges -- an opportunity for under-served? Analysis of educational and economic outcomes for proprietary students
FINAL REPORT:
1.For-Profit Student Heterogeneity.
This project utilizes the data provided by the National Center for Education Statistic (NCES): the National Postsecondary Student Aid Study (NPSAS) and the Integrated Postsecondary Education Data System (IPEDS) for the years of 1996, 2000 and 2004, as well as the Digest of Education Statistics from 1995 to 2006. The paper provides some descriptive statistics for the students in the US for-profit postsecondary educational (PSE) sector and compares these students to those in non-profit PSE sector. The study also compares the students in for-profit colleges by the school level (less-than-2-year, 2-year and 4-year). The two major findings in this paper are: students in for-profit PSE sector are systematically different from their counterparts in non-profit PSE sector; and for-profit students are a very heterogeneous group and differ across for-profit school levels.
2. Choice of For-Profit College.
This project makes it possible to carry out a study of factors significant for students' choice of for-profit college by constructing a unique dataset from multiple data sources, with primary data coming from the National Education Longitudinal Study of 1988 (NELS:88) and the associated NELS:88/2000 Postsecondary Education Transcript Study (PETS:2000). The study employs a random utility model of college choice containing a multitude of factors related to student's demographic characteristics, family resources and informational constraints, student's cognitive and non-cognitive characteristics, opportunity costs, college prices and college location. The model features 4 college choice alternatives (no college, for-profit college, 2-year or non-selective 4-year non-profit schools) and is estimated for a sample of 1992 high-school graduating cohort with a multinomial logit regression. The study finds that students who enroll in for-profit colleges exhibit lower cognitive skills, are influenced by lower family resources and lower parental involvement in their schooling. Also, for-profit students are sensitive to in-state public community college tuition.
3. Effects of For-Profit College Training on Earnings.
This paper examins the effects of for-profit training and credentials on 2000 annualized earnings of the 1992 high-school graduating cohort from the National Education Longitudinal Study of 1988 (NELS:88) and the associated NELS:88/2000 Postsecondary Education Transcript Study (PETS:2000). A basic specification of the Mincer earnings model is followed up by the rich-covariate model of selection on observables and finally by the model of selection into for-profit postsecondary training. The study finds that on average, a receipt of a for-profit credential is associated with an increase in individual annualized earnings. The evidence of positive effects of for-profit training credentials is limited due to small sample sizes. The results vary by student's sex.
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