Policy makers are becoming increasingly concerned about the high percentage of students who attend postsecondary education without completing a degree. Researchers have studied numerous potential determinants of retention behavior for postsecondary students, such as financial aid, socioeconomic status, academic preparedness, academic and social integration, and expected future wages. However, none of these studies considers students’ earnings while in school as a potential determinant of retention. Using an administrative data from postsecondary institutions matched with administrative earnings data from the state’s unemployment insurance department, our results indicate that student earnings are negatively correlated to student retention in Kentucky postsecondary institutions. Our preferred model, hazard, indicates that a percentage increase in earnings reduces time to stopout with a probability of 1.767%. Even after controlling for student intentions, students are more likely to stopout at the rate of 1.050%. Ability as measured by first-term GPA in KCTCS and credits earned in the first semester positively affects retention.
Discussion Paper Number
Jepsen, Christopher; Patel, Darshak P.; and Troske, Kenneth R., "An Exploratory Analysis of the Relationship between Student Earnings and Postsecondary Retention" (2010). University of Kentucky Center for Poverty Research Discussion Paper Series. 50.