Labor Market Returns for Upward Community College Transfer Students
Caiqun Xu
University of Rochester, Warner School of Education
Background
Methods
• Economic advantages of baccalaureate education still
exists with more supply of college educated workers in
the labor market.
Propensity score matching
• Address endogeneity of transfer status on observable
factors
• DV: Transfer treatment (1 equals to students who began
postsecondary education and transferred to 4-year colleges
and zero otherwise)
• IVs: demographics, college aspiration, SAT rank, HS
GPA, peer support, family background and school
environment
• Numerous studies have focused on the economic benefits
for students in the Community College sector – returns to
associate degree, certificates, credits and so forth.
• Of undergraduates who begin at community colleges,
approximately one third transfer to four-year higher
education institutions for a bachelor degree or higher to
obtain the college education premium.
Fixed Effects
• DV: Logarithm of annual earnings
• Main IVs: Transfer treatment; and completion of a
baccalaureate degree,
• Gender and race were subsumed
• Compared to students who start their postsecondary
education directly at four-year colleges (direct attendees
hereafter), community college students who transfer to the
four-year institutions may suffer from a “transfer shock”
in the earnings.
Purpose
Figure 2 – Surveyed youth in the treatment and control
groups with some baccalaureate education earned more or
less the same regardless of the transfer status.
• For baccalaureate or above degree holders, direct attendees
at four-year colleges earned more than upward transfer
students.
• The earnings gap between direct attendees and upward
transfer students is larger for baccalaureate degree holders
than the gap for youth with even higher degrees.
• It seems that transfer status will be largely associated with
earnings penalty for youth who complete baccalaureate
education in the labor market
Table 2 reports the heterogeneous effects of transfer status on
earnings by gender and minority status
• Earnings penalty caused by transfer status was larger for
female youth than that for the male no matter whether they
complete baccalaureate education.
• Upward transfer status had larger negative effect on students
from minority groups.
40000
Figure 2. Annual earnings for transfer students and direct attendees
by education attainment, 2002-2013. Annual earnings for direct
attendees are marked with solid diamonds, triangles and dots while
earnings for transfer students are hollow ones.
20000
Table 1 compares the results of the fixed effects and OLS model.
• Fixed effects model controls for time independent unobserved
heterogeneity
• Transfer students with some college earned 15.5% less than
direct attendees
• This penalty was larger for baccalaureate degree holders –
upward community college transfer students earned roughly
32% less than direct attendees
0
10000
Annual Earnings
30000
Results III: PSM-Fixed Effects
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Table 2 Heterogeneous Effects by Gender and Minority Status
Women
Variables
Men
Min.
Maj.
Transfer
-0.052
-0.228** -0.161*
-0.152**
Baccalaureate
0.153*
0.258**
0.190*
0.217**
degree
Transfer*BA/BS
-0.043
-0.242*
-0.187
-0.123
R2
N
0.481
2,670
0.447
3,280
0.420
2,408
0.478
3,542
Conclusions
• Figure 1- Male youth earned more than female peers at
most of the time points for both transfer students and
direct attendees
• Around 2006 an 2007 when interviewees graduated from
college, direct attendees at 4-year were better paid than
upward community college transfer students
• The earnings gap seems to be bigger for female youth than
that for male youth
• Since the transfer status associates with multiple factors at
various levels (individual, institutional and state policies),
the decision of an initial enrollment at community college
and then transfer to 4-year colleges is potentially biased.
Data & Sample
Results IV: Heterogeneous Effects
Result I: Descriptive Analysis
• In spite of numerous studies that focus on economic
benefits of community college education, very few have
specifically asked how different the upward transfer
students will be in the labor market when compared to the
direct attendees.
• To address the endogeneity raised by transfer status, this
poster presentation estimates the effect of transfer status on
annual earnings using propensity score matching and fixed
effects model to see if there is any earnings penalty or
transfer shock caused by upward transfer decision.
Results II: Descriptive Analysis
2012
2013
• Even though upward transfer community college students
overall earn less than direct attendees, they are able to
attenuate the negative transfer penalty by completing the
baccalaureate education.
• Yet the return to baccalaureate degree is much larger for
direct attendees than upward transfer students.
• Policymakers should be well aware of the fact that the
upward transfer does not necessarily mean that transfer
students will obtain the same economic benefits as direct
attendees in the labor market even though a baccalaureate
degree is secured.
• State and institutional policymakers who seeks for more
baccalaureate degree holders through the transfer function of
community colleges might be very cautious of using
economic benefits as supportive evidence.
• On the other hand, state and institutional policymakers may
want to focus on institutional factors that may contribute to
the earnings differences between transfer students and direct
attendees and to figure out corresponding services for the
transfer students to improve baccalaureate success and reduce
the earnings gap.
Year
Data
• NLSY 1997 (1997-2013)
• 8,964 youth between 13 and 17 years old in the initial wave
• At the most recent Wave 16, about 80%(7,174) remained in
the survey
• In Wave 1, female 49%, 51.9% non-black/non-Hispanic,
26% Black non-Hispanic, 21.1% Hispanic or Latino, and
0.9% mixed
Analytic Sample
• 2,784 youth who accessed to postsecondary education at
community colleges or 4-year institutions
• Other transfer patterns like 4-2-4 and 4-2 (8.8%) were
excluded
Direct Attendees(F)
Transfers(F)
Direct Attendees(M)
Transfers(M)
Figure 1. Annual earnings for transfer students and direct attendees by
gender, 2002-2013. Annual earnings for direct attendees are marked with
solid diamonds and triangles while earnings for upward community college
transfer students are hollow ones.
Table 1. Regression Results for the Earnings Model
Fixed Effects
OLS
Variables
B
S.E.
B
S.E.
Transfer
-0.155**
0.057
0.079*
0.038
Baccalaureate
0.224**
0.066
0.107**
0.031
degree
Female
---0.222***
0.022
Minorities
---0.023
0.022
Transfer*BA/BS
R2
N
-0.163*
0.454
5,950
0.077
-0.038
0.048
0.366
5,950
Future Extensions
Questions remain open
• Why do the upward community college transfer students earn
significantly less relative to direct attendees at four-year
colleges?
• To find out the answer, is it possible for researchers to model
the performance of transfer students at each momentum (e.g.
major selection, GPA, total credits, skills) after the upward
transfer using structural equation model?