What’s behind Rising Returns to High-Quality College Education?
By Oksana Leukhina and Joseph McGillicuddy
Federal Reserve Bank of St. Louis
October 25, 2019
* Research has focused on the financial returns to a college degree, but few studies have looked at whether the quality of the college also matters.
* An analysis of college students in the early 1980s and the early 2000s suggests that attending a high-quality college leads to higher graduation rates and income.
* These gains from college quality also appear to have risen over time.
* These rising gains may be due to a growing learning ability gap between students attending low-quality schools and those at high-quality schools.


When looking at student outcomes as a function of college quality (I'd call their measure based on freshman average SAT score "selectivity"), they control for student aptitude test scores in high school but not for student grades. High school grades and difficulty of coursework are the most important factors for being admitted to selective schools, so the finding that students do better when they attend selective schools may be partially explained by correlation of high school GPA and course difficulty with college grades.