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Educational Authority in the ‘Open Door’ Marketplace: Labor Market Consequences of For-profit, Nonprofit, and Fictional Educational Credentials

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In recent years, private for-profit education has been the fastest growing segment of the U.S. postsecondary system. Traditional hiring models suggest that employers clearly and efficiently evaluate college credentials, but this changing institutional landscape raises an important question: How do employers assess credentials from emerging institutions? Building on theories of educational authority, we hypothesize that employers respond to an associate’s degree itself over the institution from which it came. Using data from a field experiment that sent applications to administrative job openings in three major labor markets, we found that employers responded similarly to applicants listing a degree from a fictional college and applicants listing a local for-profit or nonprofit institution. There is some evidence that educational authority is incomplete, but employers who prefer degree-holders do not appear to actively evaluate institutional quality. We conclude by discussing implications of our work for research on school to labor market links within the changing higher education marketplace.

2016