Finance and Economics Discussion Series: The Effects of Two-Year College on the Labor Market and Schooling Experiences of Young Men

This paper uses the NLSY to examine (1) the returns to two-year college, (2) whether attendance at a two-year college helps students to transfer to four-year college, and (3) whether reducing tuition would alter attendance enough to affect labor outcomes. I find that the returns to a year of two-year college are large (7 to 10 percent). Completing an associate's degree raises wages further. One year of two-year credits has the same effect on subsequent four-year attendance as one year of four-year credits. Finally, simulations show that reducing tuition could raise income modestly by increasing college attendance.