Working Paper: NBER ID: w22880
Authors: Veronica Minaya; Judith Scott-Clayton
Abstract: Policymakers at the state and federal level are increasingly pushing to hold institutions accountable for the labor market outcomes of their students. There is no consensus, however, on how such measures should be constructed, or how the choice of measure may affect the resulting institutional ratings. Using state administrative data that links postsecondary transcripts and in-state quarterly earnings and unemployment records over more than a decade, we construct a variety of possible institution-level labor market outcome metrics. We then explore how sensitive institutional ratings are to the choice of labor market metric, length of follow-up, and inclusion of adjustments for student characteristics. We also examine how labor market metrics compare to the academic-outcome-based metrics that are more commonly incorporated into state accountability systems. We conclude that labor market data provides information that is quite distinct from students’ academic outcomes. Institutional ratings based on labor market outcomes, however, are quite sensitive to the specific metric. The choice of metric and length of follow up appear to matter much more than compositional adjustments. Our findings suggest a cautious approach: while a mix of feasible labor market metrics may be better than none, reliance on a single metric, especially if measured very early, may undermine policymakers’ ongoing efforts to accurately quantify institutional performance.
Keywords: labor market outcomes; postsecondary accountability; institutional ratings; performance metrics
JEL Codes: H52; I23; I26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market metrics (J20) | distinct information compared to academic outcomes (I24) |
| specific metric used (C52) | sensitivity of institutional ratings (G24) |
| length of follow-up (C41) | sensitivity of institutional ratings (G24) |
| reliance on a single metric (C29) | undermine efforts to quantify institutional performance accurately (D02) |
| inclusion of compositional adjustments (Y20) | impact on ratings (F69) |
| labor market outcomes (J48) | institutional performance (L32) |