Essays in the Economics of Education

Abstract

This dissertation studies the reasons for and consequences of different choices in human capital investment. The theme connecting the three essays is a desire to understand reasons for inequality in educational choices and outcomes, as well as shed light on policies that may or may not remedy those inequalities. In each chapter, I use quantitative casual inference methods and rich administrative data to understand students' educational trajectories.

The first chapter investigates the role of beliefs about academic performance in explaining gender differences in college major choice. I run a randomized controlled trial with undergraduate students across seven STEM disciplines. Treated students receive information about their performance relative to their classmates and to STEM majors. I find that absent intervention, men overestimate their own relative rank by more and are more likely to underestimate how other STEM majors perform, while women are more likely to overestimate others. The intervention shrinks gender gaps in biased beliefs by between a third and half. Treatment also closes the two-credit gender gap in STEM course-taking during the subsequent semester by ten percent. These changes are driven largely by low-performing, overconfident men correctly updating their beliefs and taking fewer STEM credits, rather than encouraging women to stick with STEM.

The second chapter studies the effect of grading policies on college course-taking and major choice, with a focus on differences by gender. I study a natural experiment within the economics department of a large university, which changed its grading policy to give out higher grades in its introductory economics courses. I leverage this variation to compare students with the same underlying performance but who received different letter grades. I find that receiving a higher grade in introductory economics increases the likelihood that a student will take the next course in the sequence by between two and three percentage points, with much smaller effects on economics major choice. Higher economics grades lead more students to declare a major in business---the highest-earning major at the studied institution. I find little evidence that women are more responsive to grades than men. My findings suggest that grade inflation as a policy may work to retain more students within a field, but is unlikely to close gender gaps.

In Chapter Three, I study the Advanced Placement (AP) program, which is nearly ubiquitous in American high schools and is often touted as a way to close achievement gaps by income and race. Using administrative data from Michigan, I exploit variation within high schools across time in AP course offerings to identify the causal effect of AP course availability on college choice and degree attainment. I find that higher income students, White and Asian students, and higher-achieving students are both more likely to take advantage of AP courses when they are offered as well as more likely to reap the benefits of taking them. The results imply that not only does the AP program fail to close achievement gaps, it may actually be harming the most disadvantaged students. I find suggestive evidence that the negative effects for low-income and underrepresented minority students are driven by negative spillovers or the diversion of resources from non-AP students and courses, rather than direct effects of these students taking AP.