Research & Evaluation

In parallel to its work as an accreditor, the Postsecondary Commission (PSC) partners with state agencies and postsecondary institutions to study the economic outcomes of higher education programs. PSC’s value-added earnings methodology measures the wage gains that specific institutions and programs generate for students. PSC does this by comparing the actual earnings of a cohort of students to an estimate of what those same students would have earned without any further higher education. It then compares this wage gain to the costs those students paid for their education.

PSC’s studies exemplify a highly empirical, scalable approach to measuring economic outcomes in higher education. These evaluations provide detailed, reliable information on economic outcomes to state higher education stakeholders and offer institutions novel and actionable data on their economic outcomes.

PSC works with the research and analytics firm – Mathematica – to implement this measurement model and manage the analyses with partners. Mathematica brings extensive expertise in relevant domains, including economics, statistics, and social science research.

The value-added earnings methodology used in these studies has several strengths, including that it:

• Examines Entrants. PSC’s value-added earnings protocol analyzes – from the time of entry – the wages and costs of all entrants in an institution, not just its completers. This then accounts for both retention and graduation rates.

• Accounts for Lost Wages. By observing students’ actual wages from the time of entry, PSC’s methodology accounts for the indirect costs that students often incur in the form of lost wages while enrolled.

• Controls for Student Inputs. PSC’s methodology carefully constructs comparison earnings estimates that specifically account for the student characteristics most predictive of future earnings.

• Creates Optimal Incentives. Institutions that do well under PSC’s value-added earnings methodology are ones that optimize for low prices, high graduation rates, and high wages.

PSC is currently seeking partnerships with state agencies interested in studying value-added earnings outcomes in their higher education sectors. To learn more, contact PSC at info@postsecondarycommission.org.