Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources
Partly as a consequence of the substantial increase in the college wage premium since 1980, a much higher fraction of high school graduates enter college today than they did a quarter century ago. However, the rise in the fraction of high school graduates attending college has not been met by a proportional increase in the fraction who finish. Comparing two cohorts from the high school classes of 1972 and 1992, we show eight-year college completion rates declined nationally, and this decline is most pronounced amongst men beginning college at less-selective public 4-year schools and amongst students starting at community colleges. We decompose the observed changes in completion rates into the component due to changes in the preparedness of entering students and the component due to collegiate characteristics, including type of institution and resources per student. We find that, while both factors play a role, it is the collegiate characteristics that are more important. A central contribution of this analysis is to show the importance of the supply-side of the higher education in explaining changes in college completion.
We would like to thank Paul Courant, Arline Geronimus, Harry Holzer, Caroline Hoxby, Tom Kane, and Jeff Smith for comments on an earlier draft of this paper, and we are grateful to Charlie Brown, John DiNardo, Justin McCrary and Kevin Stange for helpful discussions. We also thank Jesse Gregory and Andrew Winerman for providing helpful research support. We have benefited from comments of seminar participants at NBER, the Society of Labor Economics, the Harris School of Public Policy, the Brookings Institution, Stanford University and the University of Michigan. We would like to acknowledge funding during various stages of this project from the National Science Foundation [SES 1320-0351575], National Institute of Child Health and Human Development [T32 HD007339], the Andrew W. Mellon Foundation, and the Searle Freedom Trust. Much of this work was completed while Bound was a fellow at the Center For Advanced Study in the Behavioral Sciences and Lovenheim was a fellow at the Stanford Institute for Economic Policy Research. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
John Bound & Michael F. Lovenheim & Sarah Turner, 2010. "Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 129-57, July. citation courtesy of