Essay on Economics of Education

This dissertation consists of three studies on the economics of education and labor economics. The first essay seeks to deepen understanding of high school student engagement and effort response to changes in incentives. Changing the incentives students face is one lever for educators and policymakers to improve student learning in the presence of student disengagement. A statewide postsecondary admission policy which changes minimum college admissions standards for North Carolina high school students wishing to attend college in-state provides a setting to test how student effort responds to incentive structures. Regression discontinuity estimates show that students respond to the admission policy by increasing GPA and decreasing absences and suspensions. These effects suggest an increase in student engagement, however, the boost in GPA is driven by changes in course composition, with students substituting away from more demanding coursework. These unintended consequences of admission policies on student course-taking decisions can lead students to miss important learning opportunities in high school, possibly generating detrimental effects on student postsecondary success. The second essay, coauthored with Hugh Macartney and Eric Nielsen, analyzes the effect of the Great Recession on racial employment inequality in the United States. It is well understood that adverse economic shocks affect workers non-uniformly. We explore a new channel through which unequal employment outcomes may emerge during a downturn: the extensive margin of establishment deaths. Intuitively, workers who are concentrated in less resilient establishments prior to an economic decline will be disproportionately affected by its onset. Using rich employment and establishment data, we show that black workers bore the brunt of the Great Recession in terms of within-industry employment changes arising from establishment deaths. This finding has important implications for the evolution of worker disparities during future downturns. Finally, the third essay, coauthored with Clive Belfield and Brooks Bowden, examines the use of benefit-cost analysis by the federal government on education regulations from 2006 to 2015. Benefit-cost analysis is an important part of regulatory decision-making, yet there are questions as to how often and how well it is performed. Here we examine 28 Regulatory Impact Assessments performed by the federal government on education regulations since 2006. We find many Regulatory Impact Assessments estimated costs, albeit using informal methods, but most failed to adequately report benefits. Also, most studies did not estimate net present value or clearly report methodological assumptions. In reviewing the relatively high quality studies we identified a number of discrepancies from best practice. Most importantly, few Regulatory Impact Assessments attempted a social benefit-cost analysis: Most examined ”administrative burdens” from compliance with legislation. This alternative focus on administrative burdens has significant implications for economic evaluation in practice. Together, these essays advance what we know about higher education policy, labor market policy, and means of evaluating policies in both fields.