Do Students Benefit From Going Backward? The Academic and Labor Market Consequences of Four- to Two-Year College Transfer

Using public higher education data from one small state and using distance to the closest two-year college as an instrumental variable, this CAPSEE working paper examines the effects of four-year to two-year college transfer on “struggling” students, or those who earned less than a 3.0 grade point average in the first term. Results indicate that these four- to two-year transfer students are more likely than similar non-transfer students to attain two-year college credentials (including associate degrees and long- and short-term certificates); the gain is concentrated among women who tend to enroll in health-related programs. What is more, struggling students who transfer to two-year colleges are no less likely than struggling, non-transfer students to earn a bachelor’s degree. Early employment outcomes also indicate that the labor market does not penalize four- to two-year college transfer behavior. Falsification tests show strong first-stage results and no correlation between distance and socioeconomic indicators, which supports the use of distance as an instrumental variable for four-year to two-year college transfer status. The findings indicate that four-year to two-year college transfer can improve college completion for students struggling in four-year institutions.