| Liang Zhang
University of Arizona and Cornell University
How college affects students: Toward the reconciliation of theory with empirical evidence
FINAL REPORT:
As the majority of high school graduates in the United States attended college, the differentiation of educational attainment increasingly went beyond the dichotomy of college graduates versus non-college graduates. Many researchers in finance of higher education and in labor economics have made the case that college quality was an important element in the formation of human capital and transmission of socioeconomic status. These scholars, however, did not emphasize the context in which college quality took effect (e.g., they did not underscore the centrality of socioeconomic status in determining college quality) and did not extend the analysis of the effect of college quality to other aspects of students' life.
This study expands previous work in two important ways. First, I explore the discrepancies between the empirical findings of the relatively small effect of college quality on graduates' earnings and what social theories would suggest about the effect of college quality. The economic effect of college quality is reexamined--Ńnot only for an "average" student, but also for different students. Results suggest that there exist great variability in the effect of college quality among students with different characteristics such as gender, race/ethnicity, family income, parental education, ability, and major field of study. Moreover, the effect of college quality is expanded from examining only the economic benefit to considering other student outcomes, including job satisfaction and graduate degree accomplishment. Findings indicate that college quality has large and significant effects on these non-economic outcomes.
Second, I move on to examine the role of college quality in society by linking the analysis of the effect of college quality with the analysis of the effect of socioeconomic status on college quality, thus enabling me to tie these elements together and paint a more complete picture. I see conflicting roles of high-quality colleges in American society. They offer mobility while preserving the status quo; they promote (some) equality while perpetuating inequality. As a result, theories often succeed in predicting and explaining some findings but not all of them. Human capital theory, which perhaps explains the positive effect of a high-quality college education, ignores the intricacy among social class, intellectual ability, and educational attainment. In contrast, social reproduction theory, which better captures the intertwining relationship among these factors, fails to recognize the substantial economic mobility enjoyed by lower-SES students graduating from high-quality colleges.
In looking at the implications of my data and theory for the future of finance in American higher education, I suggest that equality could be promoted at two levels. First, need-based aid especially need-based grants should be increased to take down the financial barrier of attending high-quality colleges for students from low-income families. The relatively larger effect of college quality for lower-income students is suggestive of substantial financial barriers for them in attending high-quality institutions. Second, equal opportunity should be provided much earlier. Because social reproduction is primarily through crystallized family factors in the form of individual ability, financial aid policies of post-secondary education are not likely to solve the long-term inequality issue. Considering the large and persistent effect of financial resources on students' achievement at their young age especially for those from low-income families, perhaps that is the best time when educational policies can make a real difference.
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