Report: Employers Show No Preference Toward For-Profit Grads Over Community College Grads

By Allie Bidwell, Communications Staff

Despite often paying nearly five times as much as community college students for their credentials, graduates of for-profit institutions don’t appear to have a leg up in the hiring process, according to a new study.

Cory Koedel, an associate professor of economics and public policy at the University of Missouri–Columbia, found in a study published in the Journal of Policy Analysis and Management that hiring managers showed no preference toward graduates of for-profit colleges over community college graduates with similar credentials.

“When people are weighing their higher-education options, tuition cost and the ability to gain employment after school should be considered heavily,” Koedel said in a statement. “This study shows that no significant difference exists with respect to generating employer interest between individuals with community college and for-profit degrees. For many people, community college may be the better option financially.”

Koedel – along with Rajeev Darolia, an assistant professor in the university’s Truman School of Public Affairs, and their co-authors Paco Martorell, Katie Wilson, and Francisco Perez-Arce – sent nearly 9,000 fictitious resumes to job postings in seven major cities (Atlanta, Boston, Chicago, Houston, Philadelphia, Sacramento, and Seattle) in six different occupational categories (administrative assisting, customer service, information technology, medical assisting other than nursing, medical billing/office, and sales), and tracked the response rate.

The researchers did find small, although not statistically significant, evidence that applicants from for-profit colleges received less interest than community college graduates, and that community college graduates receive slightly more interest than high school graduates.

While it’s possible that for-profit and community college graduates do not differ significantly in the skills employers are seeking, those doing the hiring could also be unaware of the “differences in quality” between the two sectors, the researchers write in the study.

The findings are notable because some view for-profit institutions as an alternative to community colleges in certain vocational areas, and the two sectors often compete for similar types of students. But the average annual tuition at for-profit colleges is almost five times as high as the average annual tuition at community colleges, the study said, and students at for-profit colleges are more likely to take out student loans and accumulate larger amounts of student loan debt.

Also notable is the fact that employers also appeared to have no preference for for-profit or community college graduates relative to high school graduates.

“These results are surprising given the large non-experimental literature documenting the returns to education in general, and specifically to sub-baccalaureate education,” the study said. But there could be several explanations for the results, the researchers wrote, such as the types of occupations they used in the experiment, or the fact that the fictional applicants were new graduates who may not have yet reaped the benefits of higher earnings that might appear later on in their careers.


Publication Date: 11/5/2015

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