Author(s)  
Eleanor Wiske Dillon, Jeffrey Smith

We consider the effects of student ability, college quality, and the interaction between the two on academic outcomes and earnings using data on two cohorts of college enrollees. Student ability and college quality strongly improve degree completion and earnings for all students. We find evidence of meaningful complementarity between student ability and college quality in degree completion at four years and long-term earnings, but not in degree completion at six years or STEM degree completion. This complementarity implies some tradeoff between equity and efficiency for policies that move lower ability students to higher quality colleges.

JEL Codes  
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
D19: Household Behavior and Family Economics: Other
C78: Bargaining Theory; Matching Theory
Keywords  
college education
college students
academic performance