College, Debt, and Gender: the Influence of Outside Options on Higher Education

Abstract:

Women enroll in college at substantially higher rates than men, yet experience worse post-college outcomes, including lower earnings, lower labor supply, and higher student debt balances. This paper studies the role of gender differences in non-college labor market opportunities in shaping college enrollment, student debt, and aggregate gender inequality. We show that women's higher matriculation rates are concentrated in lower-income areas where non-college outside options are weaker, and that women disproportionately attend lower-quality, lower-cost institutions while still accumulating more student debt and earning less after graduation. To interpret these findings, we develop a model of college and career choice in which worse outside options raise the net return to college, increasing enrollment and debt even when post-college earnings remain lower. The framework highlights how changes in non-college labor markets can generate opposing movements in female welfare, the college earnings premium, and aggregate gender earnings gaps through compositional effects, with important implications for higher education and student debt policy