Research mixes education with economics

Last spring, Princeton economists Cecilia Rouse and Jesse Rothstein released a working paper about the effects that debt, or the absence of debt, can have on the career choices of recent college graduates. Using data from an anonymous university that adopted a no-loan policy in 2001 (the year that Princeton moved from loans to grants), the authors found what Rothstein calls a “surprisingly large” change: About 5 percent of the students who benefited from the reduction of loans shifted to relatively low-paid jobs in education, government, or nonprofit organizations.

While a noneconomist might see the shift as intuitive, Rothstein says, “The economic models that we usually work from would imply that [the no-loan policy] shouldn’t have much of an effect.” Student-loan debt, when viewed as a portion of lifetime earnings, is a minor expense that should not affect career decisions, Rothstein explains. But that view may not account for short-term constraints on credit. If a student borrows $20,000 for college, he or she will not be able to borrow as much when deciding to buy a car or a home. Those credit constraints, Rothstein says, are the most plausible explanation for the difference in career choices observed in the data.

Combining economics with topics in education is nothing new for Rothstein, an assistant professor of economics and public affairs, or Rouse, the Theodore A. Wells ’29 Professor of Economics and Public Affairs. Rothstein has co-authored an analysis of affirmative action in law-school admissions, which found, among other things, that eliminating affirmative action could cut the number of black law students by half. Rouse’s ongoing projects include an extensive, six-year study of an accountability system in Florida’s public schools. Preliminary findings have shown that schools that received failing grades responded by focusing more on low-performing students, and student test scores improved in each of the three following years.

Education, Rouse says, fits into the field of economics because it plays an important role in human capital, which in turn shapes a nation’s economy. Both Rouse and Rothstein work in the University’s Education Research Section (ERS), an affiliation of social scientists who study education at all levels. Rouse, the section’s founder and director, started the group five years ago when she noticed several pockets of interesting education research at Princeton.

While most of the researchers knew about the work being done elsewhere on campus, she says, “What was missing was the public-service aspect.” They were connecting with each other, but not with the people who actually determine education policy. So in addition to drawing researchers together, ERS reaches out to policymakers — mostly public school superintendents and administrators — with an annual spring conference that covers leading research and practices in schools. Last spring, the focus was on strengthening the teacher workforce. This year, researchers and administrators will examine how media and technology affect children.

While bridging research and practice can have positive effects, Rouse says that some uncertainty is inevitable. For instance, Rouse and colleagues Lisa Barrow *99 and Lisa Markman studied computer-aided instruction in algebra and pre-algebra in three school districts. On average, students’ math scores improved, but in one district, they declined. “There are limits to any study,” Rouse says. “Research doesn’t answer all the questions.”