Choice of for-profit college

In this paper I investigate whether students self-select into the U.S. for-profit colleges or whether the choice of for-profit sector is accidental or due to the reasons external to the students (geographic exposure to for-profit providers, tuition pricing, or random circumstances). The main student-level data samples come from the National Education Longitudinal Study of 1988 (NELS:88) and the associated Postsecondary Education Transcript Study (PETS:2000). I estimate a multinomial logit of college choice and find that students self-select into for-profit colleges and that the choice of for-profit college is affected by community college tuition. The probability of a student choosing a for-profit college is also heavily influenced by the student's socioeconomic background and parental involvement in the student's schooling. The students with higher school absenteeism are more likely to enroll into for-profit college. Finally, the concentration of for-profit colleges in the student's county is important for the choice of for-profit college.

► This study investigates whether students self-select into the U.S. for-profit colleges.
► The study questions whether the choice of for-profit sector is accidental or due to the reasons external to the students.
► The study finds that the choice of for-profit sector is characterized by lower parental involvement in student's schooling.
► The probability of choosing for-profit sector increases as in-state community college tuition rises.
► The probability of choosing for-profit sector increases as county-specific concentration of for-profit schools goes up.