Why do some students delay college enrollment? Does it matter?

• Main Author: Lin, Yuxin
• Language: English
• Published: 2019
• Subjects: Education; Economics; Education and state; School management and organization; College attendance
• Online Access: https://doi.org/10.7916/d8-8sjb-vr05

Over one third of students in the U.S. who started college in 2012 did not enroll in the fall immediately following their high school graduation. Despite the prevalence of delayed college enrollment, however, little is known about the reasons for the delay and the consequences for academic and labor markets outcomes. Conventional human capital theory suggests that formal education should precede work in order to maximize the period of benefiting from the returns of investment in education. As such, the reasons for students delaying their college enrollment are still unclear. Usually, it has been perceived either as an irrational behavior, or a constrained behavior caused by the imperfect market. The first chapter of this dissertation provides an overview of the studies that explain the phenomenon of delay, and I conclude that financial constraint is not the only explanation. Students might rationally adjust the timing of enrollment to maximize their welfare, based on their personal capabilities, preferences, and economic conditions. Factors such as behavioral bias and sociological constraints also influence students’ educational decisions. Based on the theoretical framework proposed in the first chapter, it is predominantly believed that college enrollment could be countercyclical, especially for students who are financially constrained. The second chapter takes advantage of a natural experiment and discovers one of the factors that causes college enrollment delay: the housing market boom. I use the Education Longitudinal Survey: 2002 and the Building Permit Survey to estimate the effect of local housing market booms on college enrollment timing. I find that an additional 100 increase in the annual change of building permits leads to 0.24 percentage-point increase in enrollment delay for male high school graduates. However, the temporary delay in transition to college that is caused by a housing boom does not necessarily decrease the college enrollment rate eight years, but it makes returners less likely to enroll in four-year colleges. Using data from the National Longitudinal Survey of Youth 1997, the third chapter of this dissertation examines the characteristics and earnings trajectories of delayers and the effects of this choice on academic and labor market outcomes. Propensity score matching results show that delaying college enrollment decreases individuals’ likelihood of enrolling in college, and increases their tendency to enroll in two-year colleges if they return to school. The results also demonstrate that, consistent with the study’s descriptive results, the early earnings benefits that are experienced by delayers diminish after their mid-20s and turn to significant losses over time. Oaxaca decomposition results indicate that differences in student characteristics only explain one third of the pay gap between the two groups; 60% of the pay gap is explained by delayers’ reduced likelihood of attending and obtaining a degree at a four-year college.