Panel Paper: Experimental Estimates of the Effect of Information about the Costs and Returns to Postsecondary Education on the Educational Aspirations of Parents for their Children

Saturday, November 4, 2017
Water Tower (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Albert Cheng and Paul E. Peterson, Harvard University


Despite the well-documented wage premium from completing a postsecondary education, students from certain segments of the U.S. population consistently opt not to invest in postsecondary education. Scholars have proposed several reasons for this behavior including credit constraints, administrative barriers (e.g., difficulty completing paperwork necessary for matriculation), or simply a lack of information about costs and benefits of a postsecondary education (Bettinger et al., 2012; Carniero & Heckman, 2002; Hoxby & Turner, 2013). In this paper, we conduct an experiment embedded in a survey to test whether the provision of information about the costs and returns to completing a postsecondary education affects their plans for their child’s postsecondary education.

Data come from the Education Next poll, which will be administered to a nationally-representative sample of at least 1,500 U.S. parents in the summer of 2017. Respondents will be randomly-assigned one of four treatment conditions in which they may or may not receive information about the costs and/or returns to a postsecondary education. After providing this information, we then ask parents whether they would prefer that their child enroll in a two-year program, four-year program, or neither. The table below displays the four items and their associated treatment conditions.

Table: Experimental Design

No Cost Information

Providing Cost Information

No Returns Information

Thinking about your oldest child under the age of 18, would you prefer that child attend a community college to earn a two-year degree or attend a university to earn four-year degree.

It costs $Z to complete a four-year degree, while it costs $W per year to complete a two-year degree.

Thinking about your oldest child under the age of 18, would you prefer that child attend a community college to earn a two-year degree or attend a university to earn four-year degree.

Providing Returns Information

Students completing a four-year degree earn $X annually, while those completing a two-year degree earn $Y annually over the course of their working lives.

Thinking about your oldest child under the age of 18, would you prefer that child attend a community college to earn a two-year degree or attend a university to earn four-year degree.

Students completing a four-year degree earn $X annually, while those completing a two-year degree earn $Y annually over the course of their working lives.

It costs $Z to complete a four-year degree, while it costs $W per year to complete a two-year degree.

Thinking about your oldest child under the age of 18, would you prefer that child attend a community college to earn a two-year degree or attend a university to earn four-year degree.

We will compare responses across all four treatment groups and expect to have a sample large enough to conduct several subgroup analyses, especially for segments of the population who exhibit persistently lower levels of educational attainment. For example, we plan to estimate information effects by household income levels, educational attainment levels, and racial background. Results will contribute to understanding the decision to pursue postsecondary education, especially the role that information asymmetries and gaps play.