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  5. The Returns to STEM Programs for Less-Prepared Students

The Returns to STEM Programs for Less-Prepared Students

  • Kevin Ng
  • Evan Riehl
American Economic Journal: Economic Policy (Forthcoming)

Abstract

The returns to selective STEM programs depend on: (a) whether students complete these programs, (b) earnings conditional on completion, and (c) counterfactual schooling choices. Much existing research has focused on only one of these margins—potentially leading to an incomplete picture of the returns to STEM education for students with less academic preparation. Using data from a Colombian university and two empirical strategies, we find that less-prepared students have higher earnings returns to selective STEM programs than more-prepared students, even though they are less likely to complete these programs. A key mechanism is that less-prepared students have lower-paying counterfactual schooling options.

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