Going to college has long conferred a large wage premium. We show that the relative premium received by lower-income college-goers has halved since the 1960s. We decompose the steady rise in American higher education’s regressivity using dozens of survey and administrative datasets that document 1900–2020 wage premiums and the composition and value-added of collegiate institutions and majors. Three trends explain two-thirds of rising collegiate regressivity. First, the less-selective and public institutions that disproportionately enroll lower-income students have declined in economic value. Second, lower-income students are increasingly over-represented in America’s shrinking community college sector since 1990. Third, higher-income students have driven declining humanities enrollment and expanding computer science enrollment since the 2000s, increasing their degrees’ value. Differential selection and shifts between four-year institutions are second-order. College-going provided equitable returns before 1960, but collegiate regressivity has curtailed higher education’s potential to reduce inequality and mediates 25 percent of intergenerational income transmission.

Underrepresented minority (URM) college students have been steadily earning degrees in relatively less lucrative fields of study since the mid-1990s. A decomposition reveals that this widening gap is principally explained by rising stratification at public research universities, many of which increasingly prevent students with poor introductory grades from declaring popular majors. We investigate these major restriction policies by constructing a novel 50-year dataset covering four public research universities’ student transcripts and employing a staggered difference-in-difference design around the implementation of 25 GPA-based restrictions. Restrictions disproportionately filter out less-prepared students with fewer pre-college academic opportunities, decreasing average URM enrollment shares by 20 percent. They do not measurably improve departments’ wage value-added, allocative efficiency across majors, or filtered students’ educational attainment. Using first-term course enrollments to identify students who intend to earn restricted majors, we find that major restrictions disproportionately lead URM students toward less lucrative majors, largely explaining the growth in within-institution ethnic stratification since the 1990s.

I study the efficacy of test-based meritocracy in college admissions by evaluating the impact of a grade-based “top percent” policy implemented by the University of California. Eligibility in the Local Context (ELC) provided large admission advantages to the top four percent of 2001-2011 graduates from each California high school. Estimates from a regression discontinuity design show that ELC led over 10 percent of barely-eligible applicants from low-opportunity high schools to enroll at selective UC campuses instead of less-selective public colleges and universities. Half of those participants came from lower-income families, and their average SAT scores were at the 14th percentile of their UC peers. Despite this mismatch, ELC participants overperformed in their college grades, and more-selective enrollment led participants to graduate earlier and earn higher late-20s wages by over \$1,000 per percentage point change in their enrollment institution’s graduation rate. These returns appear to exceed the average return to university selectivity among higher-testing students in this setting, implying that university admission policies targeting low-testing students can promote economic mobility without efficiency losses.

Proposition 209 banned race-based affirmative action at California public universities in 1998. Using a difference-in-difference research design and a newly-constructed longitudinal database linking all 1994-2002 University of California applicants to their educational experiences and wages, I show that ending affirmative action caused underrepresented minority (URM) freshman applicants to cascade into lower-quality colleges. The “Mismatch Hypothesis” implies that this cascade would provide net educational benefits to URM applicants, but their degree attainment declined overall and in STEM fields, especially among less academically qualified applicants. URM applicants’ average wages in their 20s and 30s subsequently declined, driven by declines among Hispanic applicants. These declines are not explained by URM students’ performance or persistence in STEM course sequences, which were unchanged after Prop 209. Ending affirmative action also deterred thousands of qualified URM students from applying to any UC campus. Complementary regression discontinuity and institutional value-added analyses suggest that affirmative action’s net educational and wage benefits for URM applicants exceed its net costs for on-the-margin white and Asian applicants.

We investigate the wage return to studying economics by leveraging a policy that prevented students with low introductory grades from declaring the major. Students who barely met the GPA threshold to major in economics earned $22,000 (46%) higher annual early-career wages than they would have with their second-choice majors. Access to the economics major shifts students’ preferences toward business/finance careers, and about half of the wage return is explained by economics majors working in higher-paying industries. The causal return to majoring in economics is very similar to observational earnings differences in nationally representative data.

As affirmative action loses political feasibility, many universities have implemented race-neutral alternatives like top percent policies and holistic review to increase enrollment among disadvantaged students. I study these policies’ application, admission, and enrollment effects using University of California administrative data. UC’s affirmative action and top percent policies increased underrepresented minority (URM) enrollment by over 20 percent and less than 4 percent, respectively. Holistic review increases implementing campuses’ URM enrollment by about 7 percent. Top percent policies and holistic review have negligible effects on lower-income enrollment, while race-based affirmative action modestly increased enrollment among very low-income students. These findings highlight that the most common race-neutral alternatives to affirmative action increase Black and Hispanic enrollment far less than affirmative action itself and reveal that none of these policies substantially affect universities’ socioeconomic composition.

State public college tuition and fees have risen sharply in recent decades. In this paper we investigate how young Americans absorbed this increase and how it affected their post-schooling financial behaviors. Exploiting state-cohort variation in tuition increases, we find that recent student cohorts accommodated tuition shocks not by forgoing college education, but instead by amassing more debt. The rise in tuition and student debt in turn contributed to a sharp decline in homeownership which was concentrated in suburban and urban areas, especially in the US Northeast and West, and in higher-priced housing markets and locations in which younger adults make up a bigger share of the residential population. Thus tuition-hiking states can expect to see a response not through a decline in workforce skills, but through weaker future spending and wealth accumulation among young consumers.

Federal disaster insurance–in the form of national flood insurance, the Federal Emergency Management Agency (FEMA), and other programs–is designed to nationally-distribute large geography-specific shocks like earthquakes and hurricanes. This study examines the local long-run distributionary effects of Hurricane Katrina and the subsequent policy response on impacted residents. Using a unique fifteen-year panel of five percent of adult Americans’ credit reports, we find persistently-higher rates of insolvency and lower homeownership among inundated residents of New Orleans ten years after the storm, relative to their non-flooded neighbors. Residents of mostly-white and mostly-black neighborhoods are similarly-impacted in the short and long run, though residents of white neighborhoods are more likely to migrate out of the city. However, residents of the large Gulf Opportunity (GO) Zone surrounding New Orleans, who were also eligible for various federal programs, obtained net financial benefits in the years following Katrina; a decade later, those residents have higher rates of consumption and homeownership, are more likely to have paid off their mortgages, and have lower rates of bankruptcy and foreclosure than residents outside the GO Zone. These net subsidies are found to be progressive—favoring young and low-income residents of the counties surrounding New Orleans—and are broadly similar across black and white neighborhoods.

We conduct an information experiment about college returns and costs embedded within a representative survey of US household heads. Baseline perceptions of college costs and benefits are substantially biased, with larger biases among lower-income and non-college households. Respondents are randomly exposed to objective information about average college “returns” or costs. We find a significant impact of the “returns” experiment, persisting in a follow-up survey two months later: intended college attendance expectations increase by about 0.2 of the standard deviation in the baseline likelihood, and gaps by household income or parents’ education decline by 20–30%. We find no impact of the cost information treatment. Further analysis supports the information’s salience, as opposed to information-based updating, as the main channel through which the returns intervention impacts intentions.

High school and college students are surrounded by a proliferation of indicators and rankings that purport to help them decide where to go to college and what to study once they’re there. This book takes a critical look at the most popular of these metrics, with chapters focusing on college’s “return on investment,” university rankings, sticker prices, average wages by college major, college “mobility” indices, and more. Writing mainly for students and their families, we explain the ways in which each of these metrics is flawed – and in some cases fundamentally misleading – as a basis for making important educational decisions. We also delineate the ways in which students’ reliance on certain metrics have skewed universities’ incentives away from high-quality education and distorted students’ and the broader public’s perceptions of the end goal of higher education, over-emphasizing private financial returns over education’s broad economic and social benefits. Better information is available to today’s students and the wider public. This book aims to facilitate important educational decisions while simultaneously reorienting public perceptions of higher education’s manifold values.

While third-party evaluators’ gender biases have been shown to exacerbate labor market inequities, the role of gender stereotypes in subtly shaping interactions between students and their teachers and mentors remains largely unexplored outside of laboratories. In this study, I analyze a novel dataset of more than 1.2 million student evaluations written by UC Santa Cruz professors spanning 1965-1979 and 1999-2009, combined with detailed student transcript records, to identify professors’ gender stereotypes and estimate their impact on students’ educational decisions. I estimate each evaluation’s genderedness by comparing the adjectives and adverbs used to describe different-gendered students who received the same letter grade in the same class, and characterize professors by the degree to which they tend to employ more male- and female-valence vocabulary in describing male and female students (Ĝ). I then exploit plausibly-random professor assignments to students’ first-quarter courses to quantify small but precisely-estimated effects of high-Ĝ professors on their students: students who take courses with high-Ĝ professors become more likely to take additional courses with that professor, take more courses in that field, and are more likely to earn a major in that field. These findings are highly robust to alternative specifications; persist in the presence of additional covariates measuring professors’ gender, evaluative positivity, explicit gender bias, and attentiveness to students; and exhibit minimal heterogeneity by discipline, time, or other characteristics. While gender-biased professors discourage female students, both male and female students are encouraged by teachers whose presentation of constructive feedback adapts to the student’s gender.

This paper documents marked changes in young Americans’ residence choices over the past fifteen years, with recent cohorts decreasingly living with roommates and instead lingering much longer in parents’ households. To understand the sources and implications of this decline in independence, we estimate the contributions of local economic circumstances to the decision to live with parents or independently. Transition models, local aggregates, and state-cohort tuition patterns are used to address the likely presence of individual- and neighborhood-level unobserved heterogeneity. In regions where many students are exposed to college costs, we find that increased tuition is associated with more coresidence with parents and less living with roommates. Where fewer youth confront college tuition, however, local job market conditions are paramount in shaping the decision of whether to live with parents.