This paper asks whether socioeconomic gaps in college admission test scores also translate into greater earnings inequality. I show that the link between test scores and labor market outcomes depends on how well the exam measures students' potential earnings returns to college quality. I estimate the distribution of these returns by exploiting a natural experiment from a redesign of the Colombian national college admission exam. I find substantial heterogeneity in the returns to college quality including negative returns for some low-income students. This suggests that raising low-income students' test scores may reduce their future earnings if the exam cannot identify which students would benefit from attending a better college.
Forgiving education systems create churning by allowing students to defer the completion of their schooling. This paper asks if time gaps in academic careers can lower educational attainment. I study an academic calendar shift in Colombia that created a one semester gap between high school and potential college entry. This brief gap reduced college enrollment rates relative to unaffected regions. Low SES students were more likely to forgo college, and individuals who did enroll after the gap chose higher paying majors. Thus academic time gaps can affect both the mean and the distribution of schooling, with implications for wage inequality.
with W. Bentley MacLeod, Juan E. Saavedra, and Miguel Urquiola
American Economic Journal: Applied Economics 2017, 9(3): 223–261
We explore how college reputation affects the "big sort," the process by which students choose colleges and find their first jobs. We incorporate a simple definition of college reputation—graduates' mean admission scores—into a competitive labor market model. This generates a clear prediction: if employers use reputation to set wages, then the introduction of a new measure of individual skill will decrease the return to reputation. Administrative data and a natural experiment from the country of Colombia confirm this. Finally, we show that college reputation is positively correlated with graduates' earnings growth, suggesting that reputation matters beyond signaling individual skill.
chapter in Productivity in Higher Education (forthcoming), Caroline Hoxby and Kevin Stange, eds.
This paper explores the implications of measuring college productivity in two different dimensions: earning and learning. We compute system-wide measures using administrative data from the country of Colombia that link social security records to students' performance on a national college graduation exam. In each case we can control for individuals' college entrance exam scores in an approach akin to teacher value added models. We present three main findings: 1) colleges' earning and learning productivities are far from perfectly correlated, with private institutions receiving relatively higher rankings under earning measures than under learning measures; 2) earning measures are significantly more correlated with student socioeconomic status than learning measures; and 3) in terms of rankings, earning measures tend to favor colleges with engineering and business majors, while colleges offering programs in the arts and sciences fare better under learning measures.