NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Labor Market Outcomes and Postsecondary Accountability: Are Imperfect Metrics Better than None?

Veronica Minaya, Judith Scott-Clayton


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Productivity in Higher Education, Caroline M. Hoxby and Kevin Stange, editors
Conference held May 31–June 1, 2016
Forthcoming from University of Chicago Press

Policymakers at the state and federal level are increasingly pushing to hold institutions accountable for the labor market outcomes of their students. There is no consensus, however, on how such measures should be constructed, or how the choice of measure may affect the resulting institutional ratings. Using state administrative data that links postsecondary transcripts and in-state quarterly earnings and unemployment records over more than a decade, we construct a variety of possible institution-level labor market outcome metrics. We then explore how sensitive institutional ratings are to the choice of labor market metric, length of follow-up, and inclusion of adjustments for student characteristics. We also examine how labor market metrics compare to the academic-outcome-based metrics that are more commonly incorporated into state accountability systems. We conclude that labor market data provides information that is quite distinct from students’ academic outcomes. Institutional ratings based on labor market outcomes, however, are quite sensitive to the specific metric. The choice of metric and length of follow-up appear to matter much more than compositional adjustments. Our findings suggest a cautious approach: while a mix of feasible labor market metrics may be better than none, reliance on a single metric, especially if measured very early, may undermine policymakers’ ongoing efforts to accurately quantify institutional performance.

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This chapter first appeared as NBER working paper w22880, Labor Market Outcomes and Postsecondary Accountability: Are Imperfect Metrics Better than None?, Veronica Minaya, Judith Scott-Clayton
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