Research Overview

In parallel to its work as an accreditor, the Postsecondary Commission (PSC) partners with state agencies to study economic outcomes in higher education. PSC measures the value-added earnings that institutions and programs generate for students 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 strives for a methodology for measuring students’ value-added earnings outcomes that rivals the rigor and accuracy of academic studies and that can also be implemented at scale. PSC hopes its methodology is of use to federal and state policymakers who are interested in implementing — and setting policy based on — rigorous, accurate, and scalable approaches to measuring economic outcomes in higher education. 

Further, the findings in our studies can inform decision makers in higher education, including institutions in their internal improvement work, students in their choices about pursuing postsecondary education, and policymakers in their general understanding of outcomes in higher education.

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

The value-added earnings methodology used by PSC has several strengths, including:

• Value-added Focus. We focus on students’ value-added earnings, not their absolute earnings. We assess the degree to which students’ choices to enroll improve their earnings over the counterfactual earnings they would experience in a scenario where they do not enroll at the institution in question or pursue further postsecondary education elsewhere. 

• All Entrants. We measure outcomes for all entrants to institutions and programs, including both eventual completers and non-completers. We do not merely measure outcomes for completers, for first-time/full-time students, or for students who receive federal financial aid.

• Comparison Group Earnings. We generate sophisticated comparison group earnings estimates — also referred to as “counterfactual earnings” — that adjust extensively for attributes of students in our treatment cohorts. We produce comparison group earnings estimates by assembling comparison groups with individuals who closely resemble students in our treatment cohorts (minus the choice to enroll in postsecondary education during the relevant follow-up period).

• Foregone Earnings. We capture the opportunity cost to students of foregone earnings during enrollment because we estimate students’ value-added earnings from their point of entry (not from graduation). Opportunity costs associated with foregone earnings constitute the majority of students’ true costs of attendance.

• Net Cost Estimates. We generate high-quality estimates of students’ net cost of attendance. Our cost estimates include tuition and fees, net of federal and state grants, exemptions, and waivers. We estimate costs for each student in each semester, based on their enrollment intensity in each semester.

• Earnings Estimates. We make high-quality observations of earnings for individuals in our treatment cohorts and in our comparison groups, based on person-level quarterly earnings data in Texas’ unemployment insurance records.

• Scale. Our study is large. We report findings for 935,767 students who enrolled in public institutions in Texas between 2008-09 and 2018-19 to pursue bachelor’s degrees, associate’s degrees, or certificates.

• Repeatability. Our methodology is software-based and operates with minimal human bottlenecks. It can be repeated in any state data system with the requisite data and data linkages.

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.