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Begin New Search Topic Higher Education Content Type Working Paper Publishing Institution Centre for Human Capital and Productivity (CHCP), Western University Publication Year within 25 Years

1. The Role of Non-Pecuniary Considerations: Location Decisions of College Graduates from Low Income Backgrounds

Author:
Yifan Gong, Todd Stinebrickner, Yuxi Yao, and Ralph Stinebrickner
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
We examine the initial post-college geographic location decisions of students from hometowns in the Appalachian region that often lack substantial high-skilled job opportunities, focusing on the role of non-pecuniary considerations. Novel survey questions allow us to measure the full non-pecuniary benefits of each relevant geographic location, in dollar equivalents. A new specification test is designed and implemented to provide evidence about the quality of these non-pecuniary measures. Supplementing perceived location choice probabilities and expectations about pecuniary factors with our new non-pecuniary measures allows a new approach for obtaining a comprehensive understanding of the importance of pecuniary and non-pecuniary factors for location decisions. We compare this approach to alternative expectations-based approaches. We also combine the non-pecuniary measures with realized location and earnings outcomes to characterize inequality in overall welfare.
Topic:
Income Inequality, Welfare, Higher Education, Data, and Location Choice
Political Geography:
North America, United States of America, and Appalachia

2. Innis Lecture: Return on Student Loans in Canada

Author:
Lance Lochner, Qian Liu, and Martin Gervais
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
This paper uses new administrative data with detailed borrower information and lengthy repayment histories from the Canada Student Loans Program (CSLP) to measure rates of return on undergraduate student loans. We document substantial heterogeneity in returns based on information available at the time loans were disbursed, including province of residence, field of study, and institution of attendance. Field of study is a particularly important determinant of rates of return, explaining 22% of the variation in predicted returns across borrowers. We explore the implications of this variation for CSLP cross-subsidization across borrowers and potential risk-based loan limits. Given the variation in ex ante predicted returns across borrowers, using all available information at the time of loan disbursement, we study the implications of potential cream-skimming of high-return borrowers by private lenders.
Topic:
Debt, Economics, Investment, Higher Education, and Student Loans
Political Geography:
Canada and North America

3. Perceived and Actual Option Values of College Enrollment

Author:
Yifan Gong, Ralph Stinebrickner, and Todd Stinebrickner
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
An important feature of post-secondary schooling is the experimentation that accompanies sequential decision-making. Specifically, by entering college, a student gains the option to decide at a future time whether it is optimal to remain in college or to drop out, after resolving uncertainty that existed at entrance about factors that affect the return to college. This paper uses data from the Berea Panel Study to quantify the value of this option. The unique nature of the data allows us to make a distinction between “actual” option values and “perceived” option values and to examine the accuracy of students’ perceptions. We find that the average perceived option value is 65% smaller than the average actual option value ($8,670 versus $25,040). A further investigation suggests that this understatement is not due to misperceptions about how much uncertainty is resolved during college, but, rather, because of overoptimism at entrance about the returns to college. In terms of policy implications related to college entrance, we do not find evidence that students understate the overall value of college, which depends on the sum of the option value and expectations at entrance about the returns to college.
Topic:
Economics, Labor Issues, Human Capital, Higher Education, Economic Mobility, and Productivity
Political Geography:
Global Focus

4. Parental Support, Savings and Student Loan Repayment

Author:
Lance Lochner, Todd Stinebrickner, and Utku Suleymanoglu
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Using unique survey and administrative data from the Canada Student Loans Program, we document that parental support and personal savings substantially lower student loan repayment problems. We develop a theoretical model for studying student borrowing and repayment in the presence of risky labor market outcomes, moral hazard, and costly earnings verification. This framework demonstrates that non-monetary costs of applying for income-based repayment assistance are critical to understanding why resources other than earnings lead to greater repayment. We further show that eliminating these non-monetary costs may be inefficient and lead to undesirable redistribution. Empirically, we demonstrate that expanding Canada’s income-based Repayment Assistance Plan to automatically cover all borrowers would likely reduce program revenue by nearly one-half over early years of repayment. Finally, we show how student loan programs can be more efficiently designed to address heterogeneity in parental transfers in the presence of non-monetary earnings verification costs and moral hazard.
Topic:
Debt, Economics, Human Capital, Higher Education, Productivity, and Student Loans
Political Geography:
United States and Canada

5. Job Tasks and the Gender Wage Gap among College Graduates

Author:
Todd Stinebrickner, Ralph Stinebrickner, and Paul Sullivan
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Gender differences in current and past job tasks may be crucial for understanding the gender wage gap. We use novel task data to address well-known measurement concerns, including that standard task measures assume away within-occupation gender differences in tasks. We find that unique measures of task-specific experience, in particular high-skilled information experience, are of particular importance for understanding the substantial widening of the wage gap early in the career. Highlighting the importance of these measures, traditional work-related proxies for gender differences in human capital accumulation are not informative because general work experience is similar by gender for our recent graduates.
Topic:
Economics, Gender Issues, Labor Issues, Human Capital, Higher Education, and Productivity
Political Geography:
United States and Canada

6. Time-Use and Academic Peer Effects in College

Author:
Nirav Mehta, Ralph Stinebrickner, and Todd Stinebrickner
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
This paper examines academic peer effects in college. Unique new data from the Berea Panel Study allow us to focus on a mechanism wherein a student’s peers affect her achievement by changing her study effort. Although the potential relevance of this mechanism has been recognized, data limitations have made it difficult to provide direct evidence about its importance. We find that a student’s freshman grade point average is affected by the amount her peers studied in high school, suggesting the importance of this mechanism. Using time diary information, we confirm that college study time is actually being affected.
Topic:
Economics, Human Capital, Higher Education, Students, and Productivity
Political Geography:
Global Focus

7. Uncertainty about Future Income: Initial Beliefs and Resolution During College

Author:
Yifan Gong, Todd Stinebrickner, and Ralph Stinebrickner
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Uncertainty about future income plays a conceptually important role in college decisions. Unfortunately, characterizing how much earnings uncertainty is present for students at college entrance and how quickly this uncertainty is resolved has proven to be difficult. This paper takes advantage of unique expectations data from the Berea Panel Study to provide new evidence about this issue. We characterize initial uncertainty using survey questions that elicit the entire distribution describing one’s beliefs about future earnings at an ideal time - immediately before students began their first year courses. We characterize the amount of uncertainty that is resolved during college by taking advantage of the longitudinal nature of the expectations data. Taking advantage of a variety of additional survey questions, we provide evidence about how the resolution of income uncertainty is influenced by factors such as college GPA and college major, and also examine why much income uncertainty remains unresolved at the end of college.
Topic:
Economics, Income Inequality, Human Capital, Higher Education, and Productivity
Political Geography:
United States and Canada