Economics of Education Review 20 2001 245–262 www.elsevier.comlocateeconedurev
Do parental income and educational attainment affect the initial choices of New Hampshire’s college-bound students?
Robert K. Toutkoushian
Office of Policy Analysis, Myers Financial Center, 27 Concord Road, University System of New Hampshire, Durham, NH 03824, USA
Received 20 February 1999; accepted 25 June 1999
Abstract
While other studies have explored the application and enrollment decisions of students, none have explicitly con- sidered how selected factors affect an individual’s choice to initially consider a particular institution. This study uses
data on where New Hampshire seniors have their SAT scores sent to examine what factors influence a student’s decision to consider attending different types of institutions in the region, and whether student choice is affected by parental
education and income. The results show that first-generation students and students with college-educated parents con- sider attending similar postsecondary institutions. Likewise, having a low family income does not appear to restrict
college-interested students from considering more exclusive andor expensive institutions. Students are also found to be most interested in institutions where their ability more closely matches the average ability profile of enrolled students.
2001 Elsevier Science Ltd. All rights reserved.
JEL classification: I2 Keywords: Educational economics; Human capital
1. Introduction
Now more than ever, colleges and universities are faced with the challenge of designing enrollment man-
agement strategies that can satisfy multiple goals. Insti- tutions of all types increasingly compete for high-caliber
students to help raise their student profiles, and work to attract a sufficient number of students to fund their
operating budgets. At the same time, federal and state governments have pressured the higher education com-
munity to ensure that a postsecondary education is within the reach of students who have traditionally been
underrepresented in higher education. This would include students from lower-income families and stu-
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2001 Elsevier Science Ltd. All rights reserved. PII: S 0 2 7 2 - 7 7 5 7 9 9 0 0 0 5 2 - 7
dents from families where neither parent has attended college “first generation students”. Title IV of the
Higher Education Act of 1965 established the Pell Grant program to target students from lower-income families,
and the five TRIO programs to assist first-generation stu- dents from lower-income families. The hope of pol-
icymakers is that these students would have the same options as their counterparts in choosing if and where to
attend college.
Aggregate statistics suggest that these initiatives have largely been ineffective in improving the educational
attainment of these disadvantaged students. Mortenson 1998a uses Census Bureau data to show that students
from the top income quartile have a much greater chance than students from the bottom two income quartiles of
completing a bachelors degree by age 24, and that the college participation gap between income groups has
been rising since the 1980s. Mortenson 1999 further found that in comparison to students whose parents have
246 R.K. Toutkoushian Economics of Education Review 20 2001 245–262
high school educations, students with college-educated parents are more likely to graduate from high school and
continue on to college. At the same time, his data show that the college continuation rate for first-generation stu-
dents has been rising since 1990. While interesting, stat- istics such as these raise more questions than they
answer. Are students with lower parental income and education predominantly found at less-expensive andor
less reputable institutions, and if so, is it because they are less qualified for admission or simply less interested
in these types of schools? It is important to determine if given their academic qualifications, disadvantaged stu-
dents have the same opportunities as other students to choose such postsecondary options, and the same interest
in pursuing a postsecondary education.
During the past 30 years, researchers have investigated how students make decisions about where to attend col-
lege, and how these decisions are affected by individual, institutional, and economic characteristics. These are
known collectively as studies of the student demand for higher education. These studies make it possible to deter-
mine if enrollments of disadvantaged students are rising and whether these students have equal chances of being
selected from applicant pools holding constant relevant characteristics such as academic abilityachievement.
Studies of individuals currently enrolled in postsec- ondary institutions can only address certain aspects of
whether students have appropriate access to higher edu- cation. Descriptive studies of students at an institution
by definition only take into account those students who have applied for admission, were offered admission by
the institution, and were willing and able to attend. Little is often known about those students who do not apply
to andor enroll in the institution. This is especially important with regard to answering questions about
access because traditionally disadvantaged students may be less likely than others to even consider pursuing a
four-year degree, much less attend a highly selective andor expensive private institution. Time-series stud-
ies that examine shares of high school graduates apply- ing to andor enrolling in postsecondary institutions
assume that all high school graduates are interested in and capable of attending college. Likewise, cross-sec-
tional studies of individual students who enroll from the applicant pool do not take into account that some stu-
dents may be underrepresented in the applicant pool. Ehrenberg and Sherman 1984 refer to this as a “selec-
tion bias” problem, and express concern as to how it may influence what is known about student demand.
A student’s decision-making process is comprised of four separate decisions: 1 whether to pursue a postsec-
ondary education; 2 whether to consider a specific insti- tution; 3 whether to apply to an institution that is under
consideration; and 4 whether to enroll in one of the institutions to which the student is admitted. Paulsen
1990 and Weiler 1994 propose similar categorizations of the student decision process. The set of institutions to
which a student is considering enrolling is commonly referred to as the student’s consideration set. Paulsen
1990 argues that the “search phase” for students described in the second and third stages is perhaps the
most important component of student demand.
One difficulty in looking at the student search phase is knowing which institutions students are considering
for their postsecondary education. An approach that has not been widely explored is to use information on the
institutions where students have their college entrance exam scores sent to represent a student’s consideration
set. This is a useful proxy measure for several reasons. Most students who plan to attend college after high
school take either the Scholastic Aptitude Test SAT or the American College Testing Program ACT test.
Furthermore, the majority of colleges and universities in the United States require all of their applicants to submit
test scores to the institution prior to being considered for admission. Institutions usually require applicants to take
a specific test, with the SAT being the most popular choice for colleges and universities in the eastern and
western regions of the country and the ACT being more prevalent in the midwestern United States.
This study uses data on all SAT takers in one parti- cular state — New Hampshire — to examine the college
search phase of students and determine if family income, first-generation status, and other factors such as aca-
demic abilityachievement and educational plans play a role in the types of institutions students initially consider
for their postsecondary education. Demand models are estimated for nine different institutions that are among
those most frequently designated by New Hampshire high school students. The institutions vary with regard
to size, selectivity, cost, affiliation public versus private, and emphasis on research. It is important to note
at the onset that this study does not address whether per- sonal and economic factors influence a student’s decision
to pursue a college degree, or their final destination for postsecondary education, but rather their initial choice of
collegesuniversities to consider.
The results show that after controlling for factors such as abilityachievement and postsecondary educational
plans, first-generation students and students with college- educated parents in New Hampshire make very similar
decisions regarding where to have their SAT scores sent. Likewise, students from lower-income families do not
appear to be restricted in terms of the types of insti- tutions that they consider for their education. Students
are found to be most interested in those institutions where the average quality of currently-enrolled students
corresponds
closely with
their own
academic achievementability.
247 R.K. Toutkoushian Economics of Education Review 20 2001 245–262
2. Literature review
