Date of Award

2017

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Dr. M. Saif Mehkari

Abstract

This paper examines the effects of students’ pre-college income on student outcomes and college admissions decisions. Under the assumption that colleges maximize utility by maximizing student outcomes, a two-stage regression model for student outcomes is building using data from the Integrated Postsecondary Education Data System (IPEDS) and the 1997 National Youth Longitudinal Survey (NLSY97). The first stage estimates a model for college quality using the IPEDS dataset. The college quality estimates are then used as independent variables in the second stage. The second stage estimates student outcomes as a function of pre- college income, ability, college quality, and demographic characteristics using the NLSY97 dataset. The results suggest that pre-college income has a positive and significant effect on post- college income but does not have a significant effect on college GPA. Conversely, the results suggest that student ability has a positive effect on college GPA but does not have a significant effect on post-college income. Assuming colleges consider post-college income potential as a factor in admissions decisions, the results indicate that a higher pre-college income would make a student more attractive to a college because the student is more likely to have a positive outcome.

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