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Accounting for institutional variation in expected returns to higher education

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Published: 2017-10-30

Authors

Shawn Dorius

Iowa State University

http://orcid.org/0000-0001-5821-7972

David Tandberg

The State Higher Education Executive Officers

Bridgette Cram

Florida International University

Keywords: higher education; return on investment; university characteristics; human capital; educational policy

Abstract

This study leverages human capital theory to identify the correlates of expected returns on investment in higher education at the level of institutions. We leverage estimates of average ROI in post-secondary education among more than 400 baccalaureate degree conferring colleges and universities to understand the correlates of a relatively new metric of institutional ROI. Results indicate that a diverse undergraduate student body, high graduation rate, and public university status are strong, positive, and robustly associated with institutional ROI. The model accounts for more than 70% of inter-university variation in ROI, suggesting that the factors we have identified are among the most important correlates of institutional ROI. We discuss the policy implications of these findings for institutions of higher education in the context of institutional rankings and a rapidly evolving education landscape, giving special attention to student body characteristics colleges and universities.

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Author Biographies

Shawn Dorius

Iowa State University

Shawn Dorius is assistant professor of Sociology at Iowa State University, where he conducts research on development and social inequality. In his prior research, he has investigated the long-run expansion of mass education, international education inequality, and the demographic determinants of population changes in test scores.

David Tandberg

The State Higher Education Executive Officers

David Tandberg, principal policy analyst at SHEEO, has interests that center on state higher education policy, finance, politics, governance, and economics. Tandberg is particularly interested in evaluating state policies meant to increase student access and success in higher education.

Bridgette Cram

Florida International University

Bridgette Cram is Student Success Manager at Florida International University. Her research centers on cultural competence and equity issues in public administration, as well as institutional interventions that enhance student access and success in higher education.

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Published: 2017-10-30

How to Cite

Dorius, S., Tandberg, D., & Cram, B. (2017). Accounting for institutional variation in expected returns to higher education. Education Policy Analysis Archives, 25, 110. https://doi.org/10.14507/epaa.25.3238