Abstract
We use administrative data from Texas to estimate how graduating from a state flagship or a community college relative to a nonflagship university affects the distribution of earnings. We control for the selection of students across sectors using a rich set of observable ability and background characteristics and find evidence of substantial heterogeneity in the returns to quality. Returns increase with earnings among UT–Austin graduates but decline among Texas A&M graduates. For community colleges, returns are negative for lower earners but go to zero for higher earners. Our estimates also point to differences in the distribution of returns by race/ethnicity.
- Received June 2014.
- Accepted October 2014.
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