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BID Brown Bag Seminar: The Returns to Admission to Higher Education Institutions: Estimates From Random Assignment in the Netherlands

Research Cluster

Speaker:David Reinstein, University of Exeter
Date: Tuesday 29 November 2016
Time: 12.30 - 13.30
Location: Constantine Leventis Teaching Room, Building One

Further details

What are the benefits of being admitted to one's first-choice university, who benefits more from this opportunity, and how and why do they gain? We offer unique evidence on these questions. The Netherlands uses a weighted random lottery procedure to allocate qualified applicants to oversubscribed higher educational institutions and courses (subjects), particularly in medicine, physical therapy, journalism and socio-legal studies. We link lottery data to rich administrative data on students' later economic and social outcomes to estimate labor market returns to getting in to one's first-choice institution, conditional on admission to the course. Institutions play an important role. In particular, winning admission to one's preferred medical school increases income by 4-7\% over a decade later. We differentiate these estimates by pre-determined demographics and institutional characteristics. Men gain substantially more than women from winning their preferred institution, and the gains are highest for institutions given the top student ratings. Our results have direct implications for admissions and university funding policy, and offer compelling evidence on how university attributes are associated with the private value of a degree. Authors: Matthias Parey, David Reinstein and Nathan Vellekoop