Race and gender diherences en educational attainment hild of study and ncrements

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Higher quality 6” x 9” black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. Bell & Howell Information and Leaming 300 North Zeeb Road, Ann Arbor, MI 48106-1346 USA 800-521-0600 UMI RACE AND GENDER DIFFERENCES [N EDUCATIONAL ATTAINMENT, FIELD OF STUDY, AND INCREMENTS TO EARNINGS (EVIDENCE FROM UNIVERSITY OF ILLINOIS TRACER STUDIES AND NATIONWIDE EARNINGS DATA) BY ELIZABETH NAABENA APPIAH B., University of North Carolina at Greensboro, 1988 M., North Carolina A&T State University, 1991 THESIS Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Education in the Graduate College of the University of Illinois at Urbana-Champaign, 2002 Urbana, Illinois UMI Number: 3044041 Copyright 2002 by Appiah, Elizabeth Naabena All rights reserved. UMI ® UMI Microform 3044041 Copyright 2002 by ProQuest Information and Leaming Company.

All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P. Box 1346 Ann Arbor, MI 48106-1346 © Copyright by Elizabeth Naabena Appiah, 2002 UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN GRADUATE COLLEGE March, 2002 date WE HEREBY RECOMMEND THAT THE THESIS BY Elizabeth Naabena Appiah ENTITLED Race and Gender Differences in Educational Attainment, Field of Study, and Increments to Earnings (Evidence from University of Illinois Tracer Studies and Nationwide Data) BE ACCEPTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF J Doctor of Philosophy KL Director of Thesis Research Head of Department Required for doctor’s degree but not for master’s.

0-517 ABSTRACT This study uses a rate of return model and a Regression technique to estimate the net effects of investment in higher education in the United States, more comprehensively on key measures of monetary and non-monetary outcomes of education. Specifically, the study examines the returns to University of Illinois education by race, gender, and field of study using the university’s tracer study data for the 5,060 1988 graduates from the UI (Urbana and Chicago campuses), after they have been in the labor forcel0 years after graduation. Recognizing that individual earnings are potentially associated with multiple factors, this study compares earnings of the 1988 graduates of the University of Illinois and explores the association between major field of study and the mean annual earnings 10 years after graduation. Clarifying the monetary and non-monetary returns of those graduating with the same degree and majors, and understanding the relationship of factors that may affect individual earnings may help to clarify the benefits of pursuing a college degree and/or major in a specific field.

The findings suggest that of the four degree levels studied, field of study was generally the strongest predictor of returns for students in University of Illinois (Urbana and Chicago campuses), although the significance of predictors varied by race and by gender. For example, the returns to graduates in professional fields such as medicine are higher than those returns to Ph. degree, master’s degree, and bachelor’s degree graduates. Also, the returns to fields classified as “high-paying” such as engineering and commerce are higher than the returns to liberal arts and science and other fields such as education, agriculture-related fields, fine and applied arts, applied life science and other social science fields.

The completion rates of bachelor’s degree also varied by race and by gender. This information about the ili monetary and non-monetary returns over the life cycle when conveyed to students, educators, employers and legislators can be helpful in broadening the understanding that helps in investing in colleges and universities. iv DEDICATION To my parents, Mr. Francis Akwasi Appiah, whose love sustained me, and whose character inspired me.

ACKNOWLEDGEMENTS A study such as this engages a number of issues. Consequently, I am indebted to many people for their assistance. The encouragement and guidance given by Dr. William Trent, my primary advisor and Dr.

McMahon, both in planning the study and while it was in preparation was invaluable. McMahon’s constructive suggestions on early drafts of the study contributed in many ways to its completion. Many thanks to Dr. Joyce Allen-Smith, who reviewed and criticized the draft, and for providing information and making useful suggestions.

Thanks to the University of Ilinois Office for Planning and Budgeting and the University Office for Academic Policy Analysis for providing me with all the necessary data needed for the study. Even though I solicited and received assistance from the individuals mentioned, the responsibility for accuracy in concept, fact, and presentation remains with the researcher. TABLE OF CONTENTS LIST OF v. 1 Objective and Focus of the Study.

HH“ HH HH ng ng vi 6 The Theoretical Framework and Research Method. 10 CHAPTER IT LITERATURE REVIEW. 19 Race and Gender Differences in Educational Attainment and Earnings. 19 Non-Market Outcomes of Higher Education.

sen 39 CHAPTER HI THEORETICAL FRAMEWORK. kerrevrvee 48 Theoretical Foundations in Economics of Education. cv 48 CHAPTER IV METHODOLOGY. QH nHnHH HH g0 11110 re egee 5? Methods of Estimating Rates of Retum.

Ho ng ng ue 60 Measuring per Student Cycle Costs for the Private Rates of Retum: UI. 80 The Eamings Function Method. co ng HH HT re vườ 84 CHAPTER V EMPIRICAL ANALYSIS. 1112x112 110 xko 94 Comparative Eamings by Flield of Study and Educational Attaimment.

94 Graduate Education EXp€TI€TC€S. - HH Hàng ky 106 Rates of Retum AnÏYySIS. so HH HH HH ng nen 109 University of Hlinois Retums Compared to the Nationwide Returns. 117 Empirical Estimates of the Earnings Function Method.

I9 CHAPTER VI SUMMARY AND CONCLUSION. 138 APPENDIX A PATTERNS OF GENDER AND RACE DIFFERENCES IN DEGREE ATTAINMENT WITHIN FIELD OF STUDY.- 147 APPENDIX B UNIVERSITY OF ILLINOIS (URBANA AND CHICAGO CAMPUSES) 1995 COHORTS, AVERAGE YEARS FOR A BACHELOR’S DEGREE AND GRADUATION RATE BY RACE, GENDER, FIELD OF STUDY, AND DEGREE FIELD. HH 1y 1k ri 149 APPENDEX C CORRELATION COEFFICIENT. 157 LIST OF TABLES Table Page Annual Average Work Life (18-64 years) Earnings of all Races, by Gender and Educational Attainment (in 2000 Prices).

cc ccsscecsetereceveneeee 24 Annual Average Work Life (25-64 Years) Earnings of Black & White te “Total Workers” by Gender & Educational Attainment (in 2000 Prices). 24 Annual Average Earnings (25-34 Years) of Black & White by Gender & Educational Attainment (in 2000 Prices) .ccccccscecsecsscceseesenesessosessseseereccecnes 25 Percentage Distribution of College Graduates Ages 18-64 (With 4 or More Years of College Education), by Race and Gender !975-1999. 31 Total Instruction-Related Expenditure in 1988, UIÚC. 66 Computation of Direct Costs per Student by Degree Level in 1988, UTUC.

67 Total Direct Cycle Costs per Student, by Degree Level at UTUC Fiscal 8`.,Ỏ 68 Total Indirect Cycle Costs per Degree Level for any University, Calendar 1987 Appropriate to 19§8§ Graduat€s. 12x10 rerxerree 70 Annual and Total Cycle Costs per FTE Student at UTUC for 1988, "P10. 73 10 Total Instruction-Related Expenditure in 1988, UÍC. 74 1} Computation of Direct Costs per Student by Degree Level in 1988, UIC.

75 12 Total Direct Cycle Costs per Student by Degree Level at UIC, Fiscal \- 8c. 76 13 UI (Urbana and Chicago Campuses) Discipline Instruction-Related (Weighted) Expenditure in 1999 for Degree Cycle in 2000 Prices. 77 L4 Sample Size, Enrollment and Gross Completion Rates by Race/Ethnic LG. 9S 15 1997 Mean Earnings (1988 UI Bachelor’s Degree Graduates), Sample Size by Field, Race, and Gender in 2000 Prices.- 100 16 ACT Scores by Field, Race, Gender, and Sample Size.e2 101 Vill L7 Bachelor’s Degree Earnings by Field and Sample Size for ACT Scores (0:9).

105 18 Bachelor’s Degree Earnings by Field and Sample Size for ACT Scores lô, 27. 105 19 1997 Mean Earnings (1988 UI Master’s Degree Graduates) by Field, Race, and Gender in 2000 Prices. - LH nen HH. 1 ren, 107 1997 Mean Earnings (1988 UI Ph.

Graduates) by Field, Race, and £ CO. 108 1997 Mean Earnings (1988 UI Professional Degree Graduates) by Field, Race, and Gender in 2000 Prices. se kre 109 Social and Private Rates of Return to UI Education by Field, Degree, Race, and Gender (in Percent).-ó- cu HH KH HH HH nen Lil Social and Private Rates of Return to Investment in Education by Degree, Race, and Gender (UĨ and NationWide). con HH rep 118 The Regression Coefficients for UI Education Models, The Eamings Function Method.

ch HT HH HH ng hơn ngàn 121 The Regression Coefficients of Returns to Investment in UI Education by Field and Race (in Percent) .cscsesssesssscsesveseneveveecesensressverevesevevevevenenesenenses 127 The Regression Coefficients for UI Baccalaureate Models, The Earnings Function Methoỏ. HH TH TK c2 cà cv 128 Graduate Attitudes Toward Their Major at the University of Hlinois and Mean Earnings in 1997 Adjusted to 2000 Prices by Race and Gender. 132 Al Patterns of Gender & Race Differences in Degree Attainment Within Field ¡ñêi nh. 148 Bi UI (UTUC & UIC) 1995 Cohorts, Average Years’ for a Bachelor’s Degree and Graduation Rate by Race, Gender, Field of Study, and Degree Field.

150 Cl Correlation Coefficients: Race/Gender, Field of Study, Degree, and le 21. 155 C2 Correlation Coefficients: Race/Gender, Field of Study, Degree, and lb vì: iu 21. 15S ix C3 Correlation Coefficients: Race/Gender, Field, Degree, & Income (Whites Only). 155 C4 Correlation Coefficients: Race/Gender, Field, Degree, & Income (Males Only) vehewenersrasseeerersan SRS CHE HED ED ERED ED PREPS TED HEHEHE APE PEP EHEe Sr Sepoeveroupe PEPER E CEU O CHAP EPEP ER ERE EWP 156 CHAPTER I INTRODUCTION Are the benefits accrued from a University of Illinois education comparable across race and gender? There have been numerous studies of monetary retums to higher education in the United States of blacks, as well as the returns to whites.

But a new and important aspect is the differences in education and other factors influencing the earnings gap between black males and black females and against the background of the differences between blacks and whites. Another new aspect will be the focus on the relation of these earnings differences to choice of degree and choice of professional field at the University of Illinois at Urbana-Champaign (UTUC) and the University of Illinois at Chicago (UIC). Past research by McMahon (1997) and McMahon and Alexander (2001) has focused on the market returns as well as the non-market retums to investment in education at the University of Illinois, and their contributions to economic growth and to broader measures of welfare. However, this work does not address the earnings and income gaps between races.

Other research, cited below, has addressed some of the sources of differences in earings between blacks and whites. But heretofore this has not been institution specific, and also there has been little or no analysis of the sources of the difference in earnings between black males and black females or of their implications. While evidence of labor market discrimination continues to persist among minorities and white college graduates earnings, recent studies have long ignored the fundamental facts that minorities, particularly blacks have litte difficulty in gaining access to menial jobs, but encounter discrimination in obtaining high paying jobs.