highly selective colleges redux

[O]btaining unbiased estimates of the return to college quality is difficult due to unobserved characteristics that affect both a student’s attendance at a highly selective college and their later earnings. In particular, the same characteristics (such as ambition) that lead students to apply to highly selective colleges may also be rewarded in the labor market. Likewise, the attributes that admissions officers are looking for when selecting students for college may be similar to the attributes that employers are seeking when hiring and promoting workers.

Early research attempted to overcome this omitted-variable bias by controlling for observed student characteristics, such as high school grades, standardized test scores, and parental background (see, for example, Monks 2000 and Brewer and Ehrenberg 1996). More recent research has tried to overcome the bias created by unobserved variables through a variety of techniques. Hoekstra (2009) uses a regression discontinuity design that compares the earnings of students who were just above the admissions cutoff for a state university to those that were just below it. He finds that attending the flagship state university results in 20 percent higher earnings five to ten years after graduation for white men, but he does not find an effect on earnings for white women.
Estimating the Return to College Selectivity over the Career Using Administrative Earnings Data
Stacy Dale, Alan B. Krueger
NBER Working Paper No. 17159
Issued in June 2011

I'm not sure how Dale and Krueger interpret the finding of 20% higher earnings five to ten years after graduation in (white male) students who just made the cut-off versus students who just missed it.

I assume they would expect to find that the students who made the cut-off applied to a more selective group of colleges than the students who just missed the cut-off, but I don't know.

highly selective colleges and lifetime earnings

following up on Who gains from attending a highly selective college? :

...[T]he average SAT score of schools that rejected a student is more than twice as strong a predictor of the student’s subsequent earnings as the average SAT score of the school the student attended...

Estimating the Return to College Selectivity over the Career Using Administrative Earnings Data
Stacy Dale, Alan B. Krueger
NBER Working Paper No. 17159
Issued in June 2011

Assuming I'm following the argument, Dale and Krueger are saying that when you account for unmeasured factors such as a student's level of ambition, the selectivity of a school has no effect on the earnings of white children raised by educated parents. In other words, more ambitious students file more ambitious applications; they apply to more highly selective schools than do students who are less ambitious. Same SAT scores, different set of college applications.

I think.

I can email a copy of the article to anyone who'd like to read.

also from the paper:

The high selectivity of the colleges within the C&B [College and Beyond Survey] database make it particularly well-suited for this analysis, because the majority of students that attend selective colleges submit multiple applications, which is necessary for our identification strategy. In contrast, many students who attend less selective colleges submit only one application, because many less selective colleges accept all students who apply. For example, according to data from the National Longitudinal Study of the High School Class of 1972, only 46 percent of students who attended college applied to more than one school.

and:

Nearly two-thirds of the 1976 cohort and 71 percent of the 1989 cohort submitted at least one additional application (in addition to the school they attended). For both cohorts, of those students submitting at least one additional application, over half applied to a school with a higher average SAT score than that of the college they attended, and nearly 90 percent of students were accepted to at least one additional school. Of those accepted to more than one school, about 35 percent were accepted to a more selective school than the one they ended up attending. The data for black and Hispanic students (shown in columns 2 and 4) are similar, though blacks and Hispanics were somewhat more likely than students in the full sample to be accepted to at least one additional school, and to be accepted to a more selective school than the one they attended.