William R. Doyle

Adoption of Merit-Based Student Grant Programs: An Event History Analysis

As of 2005, 15 states had adopted a broad-based merit aid program, providing a combined

Public Opinion, Partisan Identification, and Higher Education Policy

1.2 billion for college students on the basis of academic qualifications. This represents a shift away from a long tradition of need-based aid at the state and federal levels. This article utilizes a Cox proportional hazards model to analyze states’ characteristics that are associated with their probability of adopting a merit aid program. Lower levels of college continuation and educational attainment are found to increase the hazard for a state’s adoption of a merit aid program, whereas higher levels of student out-migration decrease the proportional hazard for a state’s adoption of such a program.

Evaluating State Higher Education Performance Measuring Up 2000

The literature on public opinion and higher education policy has identified many important broad preferences among the public. However, little has been done to understand the relationship between partisan self-identification and preferences regarding higher education policy. This study tests whether Republicans and Democrats differ on key issues, particularly opportunity for higher education and efficiency in higher education. This article finds that Democrats are more likely than Republicans to be concerned about issues of opportunity for higher education.

Playing the Numbers

BY PATRICK M . C A L L A N , W I L L I A M D O Y L E , & J O N I E. F I N N E Y hile state governors and legislators have the ultimate responsibility for w higher education policy in this country, until now, they have been unable to compare their state’s performance with that of other states. They can do so now. Measuring Up 2000: The State-byState Report Card for Higher Education, issued last November, grades all 50 states on how well they prepare their citizens to participate in an accessible and affordable system of higher education that meets their 0 Patrick Callan is president, William Doyle is senior policy 5 analyst, and Joni Finney is vice president of the National Center for Public Policy and Higher Education. Measuring i Up 2000 is availablefree online at highereducation.org, or 5 i may be purchased in hard copy by calling 1-888-269-3652. = CHANGE MARCHIAPRIL zoo1 3 9

State-Level Responses to the Access and Completion Challenge in the New Era of Austerity:

Change May/June 2010 Some say that we now have a gender-stratified system of higher education, with nearly 60 percent of all undergraduates being women and fewer men attending each year. Recent media reports have made much of this issue. The question posed by Marcus Weaver-Hightower in this issue is what, if anything, should we— and can we—do about this situation? The battle for gender equity for women in higher education has been a long and contentious one. In 1947, 29 percent of students in higher education were women. In 1970, their share rose to about 40 percent; by 1980 the split was 50-50. In the decades since, increasing numbers of women have gone to college, to the point where now 57 percent of all students in higher education are women. This gap in college enrollment is not unique to the United States. Stephan Vincent Lacrin, writing for the Organisation for Economic Cooperation and Development (OECD), reports that in most OECD member states, females outnumber males in tertiary enrollment. The average share of women in tertiary education across OECD states stood at 54 percent in 2005. Women’s predominance extends even into the Middle East. As Philip Altbach, Liz Reisberg, and Laura Rumbley noted in the last issue of Change, “Female enrollment hovers around 50 percent in most Arab states and 58 percent in Saudi Arabia; it surpasses 60 percent in Jordan and Oman.” There are two factors that contribute to the higher education gender gap in the US. First, the gap begins, and is mostly accounted for, by gaps in high-school completion. Second, the labor market continues to provide differential earnings for men and women, even those who are similar in terms of their education, experience, and choice of careers. As long as these two issues remain unresolved, anything we do in higher education to reduce the gender gap will be working at the margins. Researchers have struggled to estimate actual high school graduation rates. In the absence of good longitudinal data, it’s very difficult to know how many students complete high school in a given period of time. But we do know that the collegiate gender gap begins to manifest itself as soon as high school graduates move into college. Among high school sophomores in 2002, for instance, 75 percent of women attended college by 2006, while only 65 percent of men went on to some form of postsecondary education. James Heckman’s (a Nobel laureate in economics) and Paul LaFontaine’s Playing the Numbers

Estimating the education-earnings equation using geographic variation

Understanding just how state leaders respond to fiscal crises and the continuing challenges of adequate funding should provide insight into how successful states are likely to be in creating environments where most citizens can attend and benefit from higher education. This article describes and begins to classify the nature and range of state responses to ongoing fiscal challenges. We focus on state-level leadership and governance, fiscal policies, and accountability mechanisms. We identify five types of responses: cutting costs (emphasizing cost controls and low-cost providers); buying degrees (allocating state funds based on outcomes not inputs); the grand bargain (providing more campus autonomy in exchange for lower funding); hunkering down and waiting (hoping that state appropriations will return to past levels); and falling apart (weak governance mechanisms compounding financial difficulties). The tradeoffs inherent in each approach are discussed.

Playing the Numbers: The Return of the Overeducated American?

We expand on the literature on the causal impact of postsecondary education on earnings by introducing a richer set of location-based measures as instruments for years of education. Utilizing data from the National Longitudinal Study of Youth, 1997, we implement six different sets of instruments based on geographic variation: presence of a four-year or two-year college in the county, inverse log distance to in-state two-year colleges, distance-weighted tuition and distance-weighted enrollment at in-state two-year colleges, and inverse log distance to all colleges. We find that these alternative measures yield differing estimates of the impact of educational attainment on earnings. Using our preferred measure of geographic variation, one additional year of postsecondary attainment results in a 9.7% increase in yearly earnings. We find a larger impact of postsecondary attainment for women, and no measurable impact of postsecondary attainment for men.

Playing the Numbers: The Best Bad Option

55 I s college worth it? In the midst of an ongoing recovery that has not sparked largescale job growth, some observers and analysts of higher education have suggested that it may not pay an individual to pursue a college education. First, there is some question about the learning that is achieved in college-level study. Recently, Richard Arum and Josipa Roksa looked at undergraduate learning gains as measured by the Collegiate Learning Assessment; they were, at best, quite modest (Arum and Roksa, 2011—see also the article about their key findings in the March/April 2011 issue of Change). Meanwhile a recent paper by economist Philip Babcock also revealed that there’s been a steep decline in the amount of time that full-time students spend on class and study combined— from 40 hours a week in 1961 to 27 hours a week in 2003 (Babcock and Marks, 2010). Since these students have, typically, a twelveto fifteenhour course load, this indicates that the amount of time spent on homework has declined by between 10 and 12 hours a week within a fairly short period of time. There is also ongoing debate about whether the economy needs as many college graduates as we currently produce—not to mention as we are planning to turn out, given President Obama’s graduation goals. Work by Richard Vedder and his colleagues at the Center for College Affordability and Productivity has shown that a substantial number of college graduates work in jobs—such as janitorial work or taxi driving—that do not require any postsecondary education (Vedder, et al 2010). A similar debate has occurred in the pages of Change, with Paul Barton arguing that we are overproducing college graduates and Anthony Carnevale, based on a very different take on the same data, concluding that “over the foreseeable future in the United States, the demand for postsecondary workers will most likely stay high” (January/February 2008, p. 29). The critics ask: how much would change if we were to close nine out of ten colleges tomorrow? Talented and productive workers would get hired, get the training they need, and be rewarded. Less productive workers would end up in the jobs they deserve as well. There would be very little change in the makeup or the functioning of the labor market. While such a drastic transformation is not on the table, changes at the margin are quite possible. President Obama’s graduation goals notwithstanding, as states struggle to pay for higher education, one possible stance for policymakers to take is that college isn’t worth it—that too many college graduates go on to take jobs that don’t require college and that the labor market could provide on-the-job-training and professional development to those who do. Such a view could quickly lead to drastically limited access to higher education. But doing so would be a tragic mistake for at least three reasons: • Increased education has a causal impact on earnings. • Within most occupations, more highly educated workers earn more. • Occupations are not static over a lifetime, and more education leads to more occupational mobility.

Does Postsecondary Education Result in Civic Benefits

49 C ollege graduates and current students are swimming in a sea of debt. As of this writing, the total amount of outstanding student loan debt has been estimated at

Impact of Community College Student Debt Levels on Credit Accumulation

960 billion (Kantrowitz, 2011). The Occupy Student Debt movement, inspired by Occupy Wall Street, has suggested that all student loan debt should be forgiven. As a starting point, members of the movement ask “that borrowers default on their student loan payments after one million individuals have similarly signed the debtors’ pledge” (Fairbanks, 2011). Others have compared the borrowing for college to the borrowing that occurred in the run-up to the housing-market crash (Schumpeter Blog, 2011). But are colleges and universities really creating the next big bubble? Truth to tell, the real problem is that students probably aren’t borrowing enough. Many exhibit a reluctance to borrow even reasonable amounts, a condition known as “debt aversion.” In the future, student debt aversion may grow, causing a crisis of not too much student debt but too little. Student borrowing is, as Schumpter recently wrote, based on the simple idea that “a graduate’s future flow of earnings will more than cover the costs of doing a degree” (p. 16). A college education has been (and continues to be) one of the best possible investments: With an overall payoff to the investment in college averaging at about 10 percent a year, borrowing at current rates (3.4 percent a year, subsidized while enrolled) makes eminent sense (United States Department of Education, 2011; Baum et al., 2010). However, the above calculations are all about averages across the entire population over long periods of time. For an individual, the bet feels much riskier. First, incomes vary tremendously across different choices of majors and professions. Second, the incomes of individuals starting out in the labor market vary according to the state of the labor market at that time. It’s all very well to say that borrowing for college will work out in the long run, but in today’s economy, many young people feel that this is a false promise. Last, the calculations above don’t apply if an individual drops out with little or nothing to show for the time and money spent on college. Nevertheless, on average college graduates not only earn more than those without the degree; current unemployment rates among those with a bachelor’s degree are 9.6 percent, while they are 4.4 percent for those with only a high school diploma (United States Department of Labor, 2011). Current labor market prospects for college graduates are somewhat worse than the overall picture, though: Nearly 15.7 percent of recent college graduates are unemployed, with a part-time employment rate of 34.1 percent. Could this mean that the old rules about college don’t hold? Unlikely, say economists at the Federal Reserve Bank of San Francisco. Unemployment among recent college graduates has all of the hallmarks of being cyclical—that is, it will probably go down when the economy recovers (Hobjin, Gardiner & Wiles, 2011). Unemployment among those with a high school diploma appears to be structural—i.e., it is likely to stay persistently high even after the current downturn is over. In short, while many are wondering if they can afford to attend institutions of higher education, they ought to be wondering if they can afford not to attend. So given the rising tide of debt, what evidence do we have that students are debt averse? Some of the best evidence available suggests that a surprisingly high proportion of students refuse student loans for which they are eligible and that they do so because they don’t trust themselves with the money. Benjamin Keys, an economist at the Federal Reserve Board, wrote about student debt aversion in his 2009 dissertation with Brian C. Cadena, an economist at the University of Colorado (Keys, 2009). In their paper, they note that about 17 percent of students in their sample of fulltime undergraduate students rejected interest-free loans for which they Playing the Numbers