Mind the Gap: Political Effects of Expected vs. Actual Returns to Higher Education

GOV/LAB Seed Project: Do the benefits of higher education live up to expectations? What happens when graduates - who invested a great deal of time and money - realize that the labor market does not value their degree as expected?

Header image borrowed from Graduación de la Promoción 2015 - I de la Universidad ESAN

(Header image borrowed from Graduación de la Promoción 2015 - I de la Universidad ESAN.)

Around the world, higher education has expanded greatly, with more than 100 million students enrolled worldwide. Increased enrollment comes at high private and public costs -- costs that are justified by the promise of social mobility and increased wages and quality of life with a tertiary degree. For a number of graduates, however, higher education ends up being a poor investment. For example, in Chile the average return for a university degree is a 62% increase in overall earnings over the course of an individual’s career. The bottom decile of students, however, face a negative return of -16%, meaning they would have been better, economically, without going to higher education. Indeed, the returns to higher education are often overestimated, and recent graduates frequently face a gap between the salaries they expect to get with their degrees and what they actually get.

To what extent, and under what conditions, do the benefits of higher education live up to expectations? What happens when graduates - who invested a great deal of time and money in higher education - realize that the labor market does not value their degree as expected? How does this gap in expectation affect the political engagement of recent graduates? Does this change their political preferences and attitudes (e.g., their political identification or how much they support redistribution)? Although the relationship between higher education and politics has been widely studied -- mostly in the US and with a focus on political participation -- the gap between expected and actual returns to higher education has been overlooked by scholarly research.

To provide an empirical answer to the above questions, MIT GOV/LAB is providing seed funding to MIT PhD candidate Loreto Cox to partner with Fundación por una Carrera, a Chilean non-governmental organization that works to expand higher education access for low-income youth by helping them access and apply for grants. Combining quantitative and experimental methods, the study will follow a large sample of higher education students in Chile as they graduate and enter the job force (over 70% of graduates this year in Chile will be reached). This research will provide new insights on the relationship between higher education and politics, and will help inform Fundación por una Carrera on the broad consequences of their core mission: to expand higher education access for low-income people.

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Loreto Cox is a fourth year PhD candidate in the MIT Political Science Department. Her research in Chile is funded in part by the MIT GOV/LAB seed grant program. Loreto holds degrees in both sociology and economics, from the Pontifical Catholic University of Chile. Before coming to MIT, she worked as a researcher in the Centro de Estudios Públicos think tank at Chile (2010 -2011) and as an advisor of the Chilean Minister of Education, specializing in issues on higher education (2012 – May 2013). Loreto can be contacted at l_cox@mit.edu.