Three Essays on the Economics of Education.

Abstract

This dissertation examines the effects of education policies implemented during primary and secondary school on educational attainment. Chapters 1 and 3 focus on a policy recently implemented in Michigan in which the ACT was incorporated into the eleventh grade statewide test, thus requiring and paying for all students to take a college entrance exam. In Chapter 1, I examine the effects of this policy on postsecondary enrollment, persistence, and choice. I first show that there are a substantial number of high-achieving poor students pre-policy not taking the ACT. I then show that the policy increases statewide enrollment at four-year institutions by 0.6 percentage points (2%), with effects concentrated among students with a low-to-mid-level predicted probability of taking the ACT in the absence of the policy. I find similar effects on enrolling through the fourth year of college, suggesting that marginal students persist. Chapter 3 exploits this same policy reform to examine selection bias in college entrance exam scores. Using pre-policy data, I compare the performance of several parametric and semiparametric sample selection correction methods at approximating the true distribution of post-policy scores. I find that when using basic student demographics or school-level information, all of the corrections I employ perform similarly poorly. However, when adding students’ eighth and eleventh grade test scores to the prediction, simple OLS does a good job at predicting the true distribution of latent scores of all students. This suggests that the level of detail of data is much more important than the choice of correction technique in correcting for selection bias in college entrance exam scores. Chapter 2 uses the random assignment in the Project STAR experiment to estimate the effect of smaller classes in primary school on college entry, college choice, and degree completion. We find that assignment to a small class increases the probability of attending college by 2.7 percentage points, with effects more than twice as large among blacks. Smaller classes increase the likelihood of earning a college degree by 1.6 percentage points and shift students towards high-earning fields such as STEM (science, technology, engineering and mathematics), business and economics.