| Scott Thomas
University of Hawaii
Deferred costs and economic returns to college major, quality, and performance
FINAL REPORT:
This paper examines the mix of first-year earnings and college related indebtedness in the context of institutional quality, academic performance, and major. I first use data from Baccalaureate & Beyond, a national sample of recent college graduates, to provide an updated description of the earnings distribution of full-time workers from a number of academic major areas. Second, I develop a multilevel earnings model incorporating demographic, family background, education, and labor market variables in order to examine the impacts of each of these factors on post-graduate earnings. Third, using the subset of students who report indebtedness as a result of the costs of their undergraduate education, I describe indebtedness distributions as well as the distributions of a debt to earnings ratio of these graduates. Finally, I examine the effects of a number of individual-level and institutional level variables on this debt to earnings ratio. Results suggest distinct patterns in graduates' earnings and debt to eamings ratios, which vary by academic major, grade performance, and type ofinstitution attended. Policy implications relating to these results are considered.
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