Wage Effects of Baccalaureate Time to Degree in the United States

19 February 2019, 3-4.30pm

Author: Dr Christopher Erwin

Only 42 percent of students earning baccalaureate degrees in the United States graduate within four years, compared to 53 percent three decades ago.  Despite this shift, and plenty of concern about potential harm to students on behalf of state legislators and university officials, we know very little about whether delayed graduation carries a labour market penalty.  Researchers examining time to degree using cross-sectional data report a negative relationship between time to degree and earnings, which presumably reflects ability.  Increases in time to degree, however, cannot reasonably be linked to lower ability over time.

Using a nationally-representative longitudinal study, we proxy for student ability and instrument for time to degree, finding no evidence of a labour market penalty for delayed graduation.  Moreover, the potential loss of earnings from later post-graduation entry into the labour market may easily be countered by higher earnings during school for those who take longer to finish. Together, these findings suggest that taking longer to complete college is not necessarily a problem that needs fixing.

This seminar is co-hosted by the NZ Work Research Institute and the School of Economics at AUT University.

View presentation.


42 Wakefield Street
AUT City Campus

About the presenter

Dr Christopher Erwin is a Research Fellow at the NZ Work Research Institute. Dr Erwin's research interests include the economics of education, labour economics and more generally applied microeconomics. His previous studies have included econometric work on measuring achievement gaps in higher education and how certain financial aid policies may distort student decision-making. He is currently working on several papers at the intersection of education and labour markets.