Job Market Paper

Estimating the Impact of Online Education on Labor-Market Outcomes

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This paper provides the first evidence on the effect of online education on labor-market outcomes. The analysis herein uses administrative data on individuals who enroll in a statewide community-college system paired with unemployment-insurance records from the state. Together, these data track the educational attainment and earnings of over 100,000 first-time college students. I use an individual-fixed-effects estimation strategy and show that students who complete courses in the online format experience larger earnings gains than their peers who complete courses in the traditional, face-to-face format. Estimates show large benefits to completing online coursework in the years immediately following initial enrollment, when a student may still be enrolled or may have just exited college. Estimates also show that earnings fall less during enrolled periods for students who enroll in online courses. These findings suggest that online education allows students to acquire college credit at a lower opportunity cost. In the long run, estimates show that there is a large, positive benefit associated with completing any amount of online credits but no significant dosage effect of completing greater amounts of online coursework.

© Francie E. Streich, 2013