Over the past three decades, the real cost of a baccalaureate education has outpaced inflation. As college attendance becomes increasingly prevalent, many economists have researched the benefits recognized over the life course of college educated individuals. Using tuition and earnings data from the Department of Education website, College Scorecard, this study compares the average economic returns of an education at public, private nonprofit and private for-profit baccalaureate granting universities across the United States. To estimate earnings over the life course, earnings data on college graduates ten years after the initial enrollment of college were fit to a Mincerian earnings model, allowing the NPV by governance to be estimated. To account for differences in incoming student quality, ACT scores were controlled for by comparing the relative “value added” of private nonprofit and public universities. Results indicate on average, private nonprofit universities consistently produce higher value for their students, with public institutions ranking second and private for-profit institutions providing the least value. Finally, results indicate that private nonprofit institutions add more value for their students than public institutions, when controlling student quality by ACT score.
How Much is Your Education Worth? The Economic Return of Private Nonprofit, Private For-Profit and Public Higher Education.
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