The Economics of Education

Social Sciences6 MIN READ

Professor Stephanie Owen’s research on access and equity in higher education comes with real-world implications

Assistant Professor of Economics Stephanie Owen in her Economics of Education course discussing school-choice policy.
By Kardelen Koldas ’15
April 14, 2022

Assistant Professor of Economics Stephanie Owen joined Colby last fall after receiving her Ph.D. in economics and public policy from the University of Michigan. An education economist, Owen’s research focuses on two themes. First, it aims to understand the socioeconomic inequality in education to explain why gaps still exist in college enrollment and attainment because of family background and income. 

Owen started this research at the University of Michigan, where she collaborated with researchers and university administrators to conduct a series of studies on access and equity. The first of those papers, “Closing the Gap,” was published last summer and looked into the university’s HAIL (High Achieving Involved Leader) Scholarship that was “designed to improve access to UM-Ann Arbor for high school students.” 

The second theme of Owen’s research explores gender in majors and field choices. “There are now more women enrolled in and graduating from college than men,” she said. “But there are still these really persistent gaps in a number of fields and, in general, some of the highest-paying fields.” 

This semester, she’s offering two courses related to her research, Economics of Education and Access, Affordability, and Equity in Higher Education. Owen recently spoke about her work. 

Why education? 

I was always interested in education and inequality. Over the course of grad school, the things I thought about and found interesting combined with data and an ability to actually study them—it was a nice intersection. I think education is one of the most powerful ways we have for mobility and closing gaps. But, of course, we know that education access and opportunity are not equally distributed. 

A part of your thesis looked at gender gaps in STEM. Tell us a bit about that research and what was unique about it. 

I’m not the first person to think about gender gaps in STEM. Various studies have shown that men tend to be somewhat overconfident about their performance, and women tend to be under-confident, especially in things that are considered stereotypically male and quantitative. That’s a descriptive fact, right? People have naturally said that this could explain why more women don’t go into STEM. But nobody has actually been able to test that in a causal way, meaning like “if we actually were able to change their beliefs, would it actually change their major choice?” Because the idea is if you could correct this under-confidence of women, then maybe you would get more of them into STEM. But no one has been able to do that in a real-world setting. 

How then did you go about doing it in the real world? 

First, I measured these beliefs and showed that, in fact, women are under-confident and men are overconfident. Then I gave them this information where I said, “Here’s how you’re doing, here’s how your peers are doing.” And it did cause them to correct their beliefs and become more accurate. The intervention didn’t actually really change women’s behavior in any way. It did seem to change men’s behavior by a bit but in a discouraging way. The men took fewer STEM classes in the next semester. So the gap closed, right? If we’re interested in the gender gap, maybe this could close the gender gap. But it’s not clear if that’s what we want to do because the result is fewer STEM majors. We would have wanted more female STEM majors and that would have closed the gap from below rather than from above. But it tells us something. It says, “Well, maybe because it was the men who changed their behavior that suggests that male overconfidence is maybe explaining part of this difference.” But the policy implications aren’t really clear.

Assistant Professor of Economics Stephanie Owen

In another paper, “Closing the Gap,” you looked at how telling prospective students how much financial aid they’d be receiving before admission impacted their decisions. Tell us more about that research at Michigan. 

You generally don’t get your financial aid package until after you’ve applied and been accepted. So (in this study) we upfront said, “If you get in—full ride, no strings attached, no asterisks.” We were able to say that with confidence because we could identify these students ahead of time. The interesting thing about Michigan’s HAIL Scholarship is we didn’t actually really change what students got. We just changed the timing and the certainty of it. We’re just changing how it’s delivered and simplifying it and making it more certain for them. And of course, it had a really, really big effect. 

The application rate increased from 26 percent to 68 percent. That’s a big jump. Were you expecting it?

To be honest, we were surprised too. Effects of this size are pretty rare in any type of research, and in education research, it’s hard to move important behaviors. Researchers have tried to ask: what can we do to increase college application and college graduation? Generally, it’s hard. So it’s very striking and suggests that some of these small tweaks—they’re fairly low cost—actually make a really big difference.

Have there been any changes in the University of Michigan’s admissions process because of what you’ve been finding?

A couple of years ago, in response to what we found, they announced this new program called the Go Blue Guarantee. It more publicly advertises that if you are below a certain income and asset level, you’ll get a full ride to Michigan. We’re hoping to continue to study it and maybe keep changing how they do it.

Anything else in the works that you can tell us about? 

We’re trying to test different aspects of the HAIL program to see which elements really make it effective. We have a working draft of that. We’re also following the students in the original paper. We care about, did they stay? Do they graduate from Michigan? Longer term, do they make more money than they would have otherwise? Are their earnings higher? We hope to follow those students for a while because we can learn a lot.

I have a couple of other projects about college course-taking and major choice. We all know students care about grades, right? But if you give them higher grades, does that push them into one major versus another? And that may be varied by gender. I have another project with a few coauthors at Michigan studying policies put in place during Covid. A lot of universities have more flexible policies about grading, where it’s easier to take things pass/fail or withdraw from courses, whereas normally those would show up on your transcript. So we’re looking at that as well and how students feel about those policies.

Most of your work seems to have direct implications for what’s happening on the ground. What kind of conversations are you hoping to start with these?

Research always has a couple of goals. One, in all of this work, is to get a better understanding of what’s going on. And then all my work involves thinking directly about different types of interventions or policies that are based on what we understand about these phenomena. Can we actually put these policies in place and change outcomes or close the gaps we care about? So ultimately, I am interested in work that informs policy. Though I think often the answer is not clear.