How Do Investments in College Pay Off? Lessons from Army Veterans

Andrew Barr

In recent years, federal policy on education has been driven by the guiding principle that “college is the best investment you can make.” Non-traditional students now comprise nearly half of college enrollment, and while there is a growing consensus on the returns for traditional students, there is little convincing evidence that these returns extend to non-traditional students, who tend to enroll later and at less-selective institutions, or how these returns vary across different types of institutions or individuals. This study attempts to answer these questions using separated Army veterans, taking advantage of two policies that generate quasi-random variation in the likelihood that veterans will attend different college types: (1) conditionally random base assignment that results in variation in the accessibility of different college types, and (2) variation in the costs of different institutions generated by the Post-9/11 GI Bill. We leverage these sources of variation using a unique panel of data on all individuals on active duty from 1991 through 2016 linked with detailed post-secondary data and earnings information from the Treasury Department. Using multiple instrumental variable approaches, we will estimate the return to college as well as how this return varies across different types of colleges and individuals.

About Andrew Barr

Andrew Barr is an Assistant Professor of Economics at Texas A&M University. His research focuses on understanding the role of financial and informational factors in the college enrollment decisions and related labor market outcomes of non-traditional and disadvantaged students. He is a former Spencer Dissertation Fellow and has received funding from the National Science Foundation, the National Academy of Education, the UC Davis Center for Poverty Research, the Russell Sage Foundation, the Laura and John Arnold Foundation, and the American Educational Research Association. His research has been published in top economics field journals, including the Journal of Public Economics and the Journal of Human Resources. He received his PhD in Economics from the University of Virginia.