How do College Students use Advanced Placement Credit? Brent J. Evans 1. Draft:

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1 How do College Students use Advanced Placement Credit? Brent J. Evans 1 Draft: Abstract: Advanced Placement credits enable entering college students to begin postsecondary education with college credits earned in high school. The paper posits a model wherein advanced credits can affect both the quality of higher education and quantity attained before turning to empirical evidence. Using nationally representative data of entering college students, this descriptive study examines how students who earn Advanced Placement credits use them on their pathway to a degree. Regression analysis suggests that students use college credits earned in high school to reduce time to degree, double major, pursue STEM majors, and take more advanced math courses instead of using the credits to increase either leisure time or hours of paid work. These results provide evidence against the argument that high achieving college students are not challenging themselves during their collegiate career. 1 Peabody College, Vanderbilt University; b.evans@vanderbilt.edu 1

2 Section I: Introduction There is a growing trend for high schools to offer college level coursework through dual enrollment (DE), International Baccalaureate (IB), and Advanced Placement (AP) courses. The AP program is the most widespread with 2.1 million students taking AP courses in 2012 (College Board, 2012b). Students benefit from taking these higher level classes because they offer more rigorous material and assignments than typical high school classes (Long, Conger, & Iatarola, 2012), and the courses signal college preparation to admission offices (Geiser & Santelices, 2004). Students also benefit from the ability to earn college credit while enrolled in high school. By passing standardized exams, students can earn college credit for AP and IB courses, and DE credits transfer to most institutions of higher education. Despite the growing prevalence of college-level courses in the high school curriculum, we know little about why students take advanced coursework in high school, how many college credits students earn from taking these courses, and how students use their earned credit once they enroll in postsecondary education. For example, there are many ways students can use these advanced credits. Students could attempt to graduate early saving time and money, or they might take a broader or deeper curriculum and use the credits earned in high school either to double major or to take more advanced coursework in a single field. Alternatively, students can substitute leisure time or hours of paid work for the time they would have spent earning those credits in college. Neither theory nor empirical evidence exists in the literature to explain how students are using this popular pathway to accumulate college credit. This paper attempts to fill that gap in the literature by presenting both theory and empirical evidence. The main focus of this paper is on how students use their AP college credit; however, there are several related issues: why high schools offer these courses, why students take them, and why postsecondary institutions provide credit for them. The paper proposes a model of how AP credits affect both the quality (institutional selectivity, major, etc.) and quantity (credits, graduate degree, etc.) of higher education and subsequently tests the implications of that model empirically by using nationally representative data on entering college students. Empirical regression results indicate students use their advanced credit to graduate early, double major, pursue STEM majors, and take more advanced math courses. This research informs policy in several ways. First, it addresses whether the widescale promotion of college level courses at the high school level is associated with positive postsecondary outcomes. Second, it addresses postsecondary institutions policies of granting college credit for advanced high school coursework and exam scores. Finally, it addresses whether college credits earned in high school is a viable approach to shortening time to degree in higher education. At a state and national level, some policymakers argue we must use our higher education system more efficiently by promoting faster time to degree, and we could potentially rely on advanced credit to encourage students to graduate more quickly (Alexander, 2009; NMSI, 2012). Whether these policy and institutional goals are succeeding is an important question that remains to be answered. This study can illuminate whether proposals to foster faster attainment of bachelor s degrees through AP credit are likely to be successful. 2

3 Section II: Background There are many ways of taking college level coursework while enrolled in high school. Students can take dual enrollment classes in which they enroll concurrently in their high school and at an institution of higher education. Because dual enrollment programs are often a collaborative effort between individual high schools and local colleges, little is known about the extent of student participation, but one dual enrollment program in New York City served over 110,000 students between 2001 and 2006 (Karp et al., 2008). A small number of high schools in the United States (1,429) offer the International Baccalaureate (IB) program, which provides an internationally recognized college level curriculum for high school students (International Baccalaureate Organization, 2013). The Advanced Placement program offered by the College Board in over 18,600 American high schools (almost 68% of all high schools) is a far more common way for high school students to take college level coursework by enrolling in an AP course of a specific subject (College Board, 2012a; NCES, 2012). AP, IB, and DE can yield college credit for students before they graduate from high school. Dual enrollment students can receive college credit from a postsecondary institution that is widely transferable. IB and AP courses provide the opportunity for students to take a subject exam at the end of each course, and many colleges grant credit for sufficiently high scores on each exam. Some institutions provide waivers of course requirements even if they do not grant actual credit towards graduation for high IB and AP exam scores. Because of the broad, national implementation of the Advanced Placement program, this paper focuses on AP courses, although the results likely apply to other forms of earning college credit in high school. In 2012, 2.1 million high school students took almost 3.7 million exams across thirty four different AP subjects spanning the curriculum including music theory, calculus, Chinese language and culture, and human geography (College Board, 2012b). Colleges often grant credit for AP exam scores of 3 or higher on a 5 point scale, which is fairly common as 56.2 percent of exams taken in 2011 received a score of 3 or higher across the nation (College Board, 2012c). Colleges typically set their own minimum required AP exam scores for offering college credit; however, some states, such as Florida, legislatively require colleges to grant credit for scores of 3 or higher (Lerner & Brand, 2008; Rockwell, 2011). In order to complete a bachelor s degree, students must accumulate a certain number of institutionally mandated credits and fulfill a combination of general education and major specific requirements. Many institutions allow AP credits to count as both credits earned toward graduating and fulfilling of course requirements while others allow lower scores to satisfy requirements but not apply as credits towards graduation. For example, the College of Arts & Sciences at the University of Virginia grants many course exemptions for AP scores of 3 and actual college credit for scores of 4 or 5. 2 Several of the most selective institutions such as Harvard and Yale do not simply give credit for AP scores. Instead, they provide accelerating standing for students wishing to graduate a term or year early if the students have 2 Most institutions have tables available such as this one ( from the University of Virginia so that students can see the number of credits they will be awarded for different exams.. 3

4 earned a minimum number of AP exam scores of 4 or 5 in the case of Yale or 5 in the case of Harvard. A few institutions, such as Cal Tech, do not great any credit for AP courses and exams. Section III: Previous Literature The wide spread adoption of the AP curriculum in high school and the prevalence of institutions providing college credit for high AP exam scores has led researchers to conducted numerous studies on AP students for a variety of purposes. There are three components of the broader literature that are especially pertinent to this paper. Who Takes AP Courses Inputs such as student ability and background are critical to the model proposed below because students' characteristics are related to whether they take AP courses. As expected, ability and previous academic achievement are strong predictors of taking college preparatory courses (Conger, Long, & Iatarola, 2009; Zietz & Joshi, 2005). Parental education and family income are also positively correlated with taking advanced courses in high school (Zietz & Joshi, 2005). Race and gender play a role in predicting advanced course enrollment as black and Hispanic students enroll at lower rates (Conger, Long, & Iatarola, 2009; Klopfenstein, 2004), and women are more likely to take advanced courses (Zietz & Joshi, 2005). Furthermore, men and women are not equally distributed across all advanced courses. Males were more likely to enroll in science AP courses in the 1980s (Stumpf and Stanley, 1996), but that gap no longer exists (Conger, Long, & Iatarola, 2009). Females more likely to enroll in advanced courses in languages and social sciences. Predictive validity College admission offices place substantial weight on the high school curriculum when evaluating applicants because they believe it predicts which students will be successful in college (Evans, forthcoming). This prompts students to take rigorous courses such as AP, IB, DE, and honors classes in high school in an effort to improve their probability of being admitted to the college of their choice. In fact, 90 percent of AP teachers believe the program has expanded due to student demand to improve their college applications (Farkas & Duffett, 2009). Other research tests whether AP courses and exams actually predict performance in college. Several studies demonstrate a strong positive correlation between advanced high school course taking and positive college outcomes (Speroni, 2011; Hargrove, Godin, & Dodd., 2008; Willingham & Morris, 1986). While others argue that students non-ap curriculum provides an equally valid prediction of college success (Klopfenstein & Thomas, 2009). What seems clear is that admission office are not using the optimum strategy for admitting students because AP exam scores are a better predictor of college success than simply taking the AP course (Geiser & Santelices,2006). Regardless of the efficacy of using Advanced Placement courses and exams in the college admission process, the fact remains that admission offices reward a challenging high school curriculum, which 4

5 drives students to take these courses. This is one major reason why AP credits affect college quality as seen in the model below. Increased Attainment and Achievement The predictive validity studies above report only correlations between taking AP courses and academic outcomes because they are plagued by selection bias as the high ability and highly motivated students are the ones most likely to enroll in AP courses in high school. Little is known about the causal effects of enrolling in these college credit bearing courses because random assignment of students to AP courses is impractical. Combining statewide panel data, a robust set of covariates, and propensity score matching, Long, Conger, and Iatarola (2012) provide the most compelling evidence that AP course taking actually improves college enrollment and GPA. In a similar fashion, An (2013) uses propensity score matching on nationally representative data and concludes that Dual Enrollment courses improve attainment through college degree completion with larger effects for low-income students. Although I do not attempt to make causal claims, the current study extends this line of inquiry by focusing on the relationships between AP college credit received through AP courses and college outcomes. Despite the wealth of literature on the patterns and predictive power of advanced course taking, no study directly examines how the actual college credit earned in these courses relates to college outcomes. This paper addresses this question empirically, but I first provide a model of how AP credit could relate to educational and future outcomes. Section IV: Conceptual Framework I propose an educational model which focuses on how advanced college credits earned in secondary education affect the educational process in higher education, which in turn leads to positive lifetime outcomes such as increased earnings. The model is student centric in that students act as individual decision makers who choose how many AP credits to earn and how to apply those credits in college. Figure 1 depicts the model. Figure 1: Advanced Placement Credits Affect the Quality of, Quantity of, and Time Allocation in Higher Education Inputs Secondary Education AP Credits Higher Education Quality Quantity Outcomes Time Allocation 5

6 Although the empirical portion of the paper focuses exclusively on the educational decisions students make in higher education, the rest of the model deserves a brief discussion. Inputs are broadly comprised of students abilities and background characteristics which directly and indirectly affect higher education. These characteristics directly impact the quality of higher education by affecting the type and selectivity of institution attended and the quantity of higher education through whether students complete a bachelor s degree or pursue postgraduate education. Pertinent to this study, inputs also indirectly affect higher education through the accumulation of college credits in high school. The effects of higher education on future outcomes are well documented. College graduates have higher lifetime earnings, improved civic participation, and better health outcomes than people who do not complete a college degree (College Board, 2010). Several of these benefits depend not only on receiving a degree but also on the quality and quantity of higher education obtained. For example, the selectivity of the college attended, a commonly used proxy for college quality, can affect future earnings (Hoekstra, 2009; Hoxby, 1998; James et al., 1989). Another measure of the quality of higher education independent of institution is earning a double major. Although there is not conclusive evidence on the returns to a double major, the best estimate in the literature is an average of a 2.3 percent wage premium to earning a double major, and certain combinations of majors have even greater payoffs in the labor market (Del Rossi & Hersch, 2008). Educational attainment (quantity) also impacts future outcomes as bachelor's degree recipients have better earnings and health outcomes than associate degree recipients and students who only attended some college (College Board, 2010). The goal of this paper is to focus on the solid arrows in Figure 1 and consider theory and evidence for how students use AP credits to alter the quality and quantity of and time allocation in higher education. Figure 2 lists the outcomes of interest categorized into these three areas. Figure 2: Components of Quality, Quantity, and Time Allocation Affected by AP Credits Quality Achievement Sector of Institution Selectivity of Institution Major/Double Major Advanced Courses Quantity Total Credits Bachelor's Degree Graduate Degree Time Allocation Time to Degree Hours Worked for Pay Leisure Time 6

7 The question of how students use AP credits in higher education is interesting because tradeoffs exist between how students could use them. Students must make decisions about how best to allocate their resources such as time, money, and advanced credits to maximize their future outcomes. One example of such a tradeoff is students can use their advanced credit to graduate early but that comes at the cost of a lower probability of double majoring. An additional example is that students may still graduate on time but use their AP credit to take fewer classes thereby having more free time to allocate towards hours of paid work or leisure. Below, I briefly describe how each component might be affected by additional AP credits, and I directly consider two issues: why students take AP classes and how students use AP credits in college. Why students take AP classes Although the model s main goal is to describe how students use AP credits once they enroll in college, why students initially take AP courses in high school is an important preliminary question. The model points to two reasons: AP courses may improve achievement and AP courses affect the sector and selectivity of the postsecondary institution in which the student enrolls. Achievement Ambitious students want to challenge themselves by taking the most advanced courses available, and advanced courses may improve students future academic performance. Possible mechanisms at work to improve achievement include having a more rigorous curriculum, stronger class peer group, and more experienced and higher quality teachers in the higher level courses (Long, Conger, & Iatarola 2012). Because AP classes have increased rigor relative to the typical high school course, advanced classes also teach students about their abilities and preparation relative to college level expectations (Bailey & Karp, 2003; Stinebrickner & Stinebrickner, 2012). Sector and Selectivity of Institution Second, these courses improve the quality of higher education by improving students chances in the competitive selective college admission process. Longterm outcomes for four-year college graduates are superior to those for two-year college graduates, and advanced high school courses improve the chances of being prepared for and admitted into four-year colleges. Students also want to attend the most selective college available because there is a payoff to earning a degree from a selective college (Hoekstra, 2009; Hoxby, 1998; James et al., 1989). Due to the predictive validity of AP courses and exams discussed above, admission offices rely on the rigor of the curriculum to assess students' likelihood of success, and students are very aware that increasing the difficulty of their high school curriculum enhances their chance of admission. Furthermore, many high schools offer additional grade points for advanced courses. For example, receiving an A in an advanced course may grant a 4.5 or even a 5.0 instead of the traditional 4.0 in a regular high school course. The accumulated effect of this benefit can grant students a substantially higher GPA when they apply to college further improving their chance of admission. 7

8 How AP Credits Affect the Higher Education Process After high school students decide to enroll in AP classes and earn AP credit through national exams, they can use those credits in a variety of ways to affect the quality of, quantity of, and time allocation in higher education. Below, I outline the different mechanisms by which AP credit can affect higher education. Quality One way in which students might use advanced credit in college is to alter their major or pursue a double major. Because advanced credits often enable students to bypass many general education requirements, more credits are available in college to focus on classes required for a major. This manifests itself in two ways. Students can select a major that requires many more credits to complete (such as engineering) or students can study two different majors. In either situation, a student may be able to accumulate enough credits and still graduate on time. Investing advanced credits in this way can directly improve life outcomes because earnings in the STEM fields, which often require a larger number of credits to complete, have a distinct payoff relative to non-stem fields (Carnevale, Cheah, & Strohl, 2012; Melguizo & Wolniak, 2012). There is also some evidence that students who double major earn a wage premium in the labor market (Del Rossi & Hersch, 2008). 3 Students may also go beyond major requirements and use advanced credit to go deeper in a certain field than they otherwise would by taking advanced coursework in that field. By skipping the introductory level of courses for which they have already earned credit, students can proceed to take more advanced courses in a specific discipline. This would lead to an overall accumulation of more coursework in a specific area of concentration. It may even enable a student to take graduate coursework during the undergraduate years. Quantity AP credit enables students to accumulate more college credit than would otherwise be possible. A student can come in with 10 credits, take a full course load each term, and graduate with 10 more credits than a fellow student who put in equal effort in college. Kane and Rouse (1995) show a return to additional college credits for women even after accounting for earning a degree. Students who invest their advanced credits in this way build additional skills and knowledge that they would otherwise only be able to learn with an increased time to degree. I can investigate this decision empirically by examining the relationship between AP credits and total credits earned in college. College credit earned in high school may also improve a student s chance to graduate with a bachelor s degree. I have already discussed how AP credits may improve the likelihood of enrolling in a four-year college, and there is a much greater likelihood of graduating with a bachelor s degree if students start in four-year college relative to a two-year college (Advisory Committee on Student Financial Assistance, 3 A student could also take a broader array of classes than would otherwise be possible without the advanced credit and not earn a double major, but I use double major as a proxy for this breadth of curriculum when examining the empirical data. 8

9 2006). Once in college, students can use their AP credits to reduce the number of credits they must accumulate in college for their degree. This enables them to take fewer courses in some terms. When students take fewer courses in a term, they can invest more time studying in fewer classes which can increase their performance and achievement in those courses thereby leading to an increased chance of graduating. Related to the accumulation of additional credit and taking advanced college courses, college credit earned in high school may lead to additional education in graduate school. If students are able to take graduate coursework during the undergraduate years because of AP credit, it could lead to a higher chance to enroll in graduate school. In the same way that AP courses signal a high level of preparation and chance of success to undergraduate admission offices, graduate courses taken during the undergraduate years signal a high level of preparation and chance of success to graduate admission offices. Time Allocation One of the most obvious uses of advanced credit is reducing time to degree. By applying credits earned in high school towards a college degree, students can attain a bachelor s degree in a shorter amount of time than they otherwise would have taken. 4 This assumes students will take the same course load each term as they would have taken in the absence of the advanced credit. If a student can complete college a term or even a year ahead of schedule, it improves a student's financial situation in two ways. It reduces the direct cost of tuition and fees because the student is in school for a shorter period of time. It also increases post-college earnings as students have more time in the labor market to add to their lifetime earnings at higher wages than they could earn before or during college. Alternatively, students can spend the same amount of time in college as they would have done in the absence of advanced credit and spend the time saved from accumulating the necessary graduation credits to earn more money while enrolled in college. Students with advanced credit can substitute time spent taking introductory coursework for which they already have credit with time spent on paid work. Although this does not reduce the direct cost of college attendance, it does reduce the cost of foregone earnings as the student can earn more money while in college than would be possible with a larger course load. Students may use AP credits this way to reduce student loan debt. This use of AP credit comes at the cost of using the credits to build additional skills in advanced college courses or potentially double majoring as the time saved from AP credit is shifted to hours of paid work as opposed to additional courses for credit. Instead of using the time saved from taking introductory courses for paid work, a student with advanced credit may use the time saved for leisure activities. The student can take a lighter course load in one or more terms and spend more time in extracurricular and social activities and still graduate in the time it 4 Although the goal for most students is finishing college in four years, in practice many students take much longer to finish their degree, and the common metric for reporting graduation rates is a six year time period. 9

10 would have taken without any AP credit. There is already some evidence that college students are spending less time in the classroom and studying than they once were (Babcock & Marks, 2011) and might be spending an increasing amount of time socializing and on leisure activities to the detriment of learning (Arum & Roksa, 2011). It is unclear whether time invested in non-academic activities is beneficial or detrimental to students long term outcomes. While spending more time on leisure activities could negatively affect achievement, total credit accumulation, and the probability of graduating, students may find value in the extracurricular activities. For example, perhaps securing an unpaid internship at the hospital increases the chance of admission to medical school. Socializing may also build soft skills that are valued in the labor market as well as increase students pre-professional network that can payoff in time. One study shows, at least for high achieving women, a positive relationship between social activities in college and early career earnings (Hu & Wolniak, 2013). For my study, I can only empirically estimate the amount of time spent on leisure indirectly. In summary, theory suggests many different ways in which students can use their AP credit in higher education, so I turn to empirical data to shed light on which of these pathways students actually use. Institutional Perspectives Before turning to the empirical sections of the paper, there are two related questions of significant interest from the institutional perspective. These are peripheral questions, and I cannot bring new data to bear on them; however, they are worthy of a brief discussion. First, why do high schools offer AP courses at all? High schools believe college-level courses offered in high school offer students a chance to experience rigorous academic material not found in the typical high school classroom (Bailey and Karp 2003). These higher level courses offer students a chance to experience college work so that they can better prepare themselves for the transition to higher education. Parent and student demand also encourage high schools to provide advanced courses. Savvy families are aware that college admission officers rely on AP, DE, and IB courses as a measure of college qualification, so they want to take more advanced level coursework to improve their chance for admission. High schools also offer these courses as a way to improve their reputation. Teachers, parents, and students broadly regard the AP curriculum favorably, and offering more AP courses may improve the school's standing. In a nationally representative survey of AP teachers, 75 percent attribute the expansion of AP courses to an effort to improve their school's reputation and 40 percent believe their high school's AP policy is influenced by an annual national ranking of high schools in Newsweek (Farkas and Duffett, 2009). Second, why do colleges grant any credit for AP exam scores? The simple answer for some colleges is that they are forced to offer credit for certain AP exam scores. Several states including Mississippi, Minnesota, and West Virginia mandate that their public institutions of higher education provide college credit for AP scores of 3 or above (Lerner & Brand, 2008). Their motivations for doing so are twofold. 10

11 First, many states face capacity constraints in their public institutions of higher education. Demand for spots at four-year institutions often exceeds supply, and with enrollment rates consistently growing, policymakers may encourage institutions to reduce time to degree by offering Advanced Placement credits. Similarly, states can save money by increasing the amount of credit awarded from high school courses. Washington state estimates that a dual credit program granting college credit for work accomplished in high school saved taxpayers $34.7 million in 2001 alone (Krueger, 2006). Even public colleges in states that do not require the acceptance of AP credit and most private colleges also offer credit for advanced coursework in high school. They do so because they face steep competition from their peer intuitions for the best students, and AP credits can be used as a recruiting mechanism. College credit is a valuable commodity in terms of time, money, and flexibility in the curriculum, and students have many options to use their AP credit in the ways delineated above. A college offering more credit for AP exam scores has a competitive advantage relative to colleges that offer less credit when a student is considering which institution to attend. Colleges attempt to balance the desire to encourage admitted students to matriculate by luring them with lots of AP credit against maintaining strict academic standards. When Dartmouth recently decided to end the policy of providing college credit for AP coursework because they deemed the AP curriculum not equivalent to Dartmouth coursework, constituents expressed concerned that the unilateral action would disadvantage the institution in encouraging students to apply and enroll (Jeon, 2013; Asch, 2013). It remains to be seen whether this institution level policy change actually affects the applicant pool, but given that the number of applicants and quality of the enrolled students are factors in US News and World Report s widely read college rankings, the competition for students is associated with notable consequences. Although the remainder of this paper focuses on the student decision to use advanced credits, these institutional issues deserve further investigation in future research. Section V: Data In an effort to offer evidence about which path college students actually chose when determining how to allocate their advanced credit, the study employs newly available transcript data from the Beginning Postsecondary Students Longitudinal Study (BPS) 2004/2009. This NCES survey gathered student interview, administrative, and transcript data from a nationally representative group of a cohort of firsttime college going students. NCES surveyed students at the end of their first year of college (2004) and then three (2006) and six (2009) years after beginning higher education. About 85 percent of transcripts across all institutions in which these students enrolled are available. The dataset includes AP credit earned from high school courses and exams before entering college as well as college outcomes and demographic information. The restricted use license also enables controlling for each student s institution of first enrollment. NCES weights provide an appropriate weighting scheme so that the results are nationally representative. Table 1 provides descriptive statistics for the sample separated by student characteristics, institutional characteristics, and outcomes of interest. As can be seen from the table, more women attend college 11

12 than men, and white students make up the majority of the sample. BPS focuses on first time college students, but not all of them are traditional students who enroll in college directly after high school as can be seen from the average age at first enrollment of 21. Almost a third of the sample has a father or mother with at least a bachelor s degree and almost 60 percent receive some form of federal financial aid. Slightly more students attend a four-year college than a two-year college, with more students attending public college than private or for-profit colleges. Important for this analysis, about 8 percent of the sample received at least one college credit for their Advanced Placement exam scores with the average number of credits earned from AP courses of nearly 10 credits. Unfortunately, only 36 students received college credit for International Baccalaureate courses in high school, so this study focuses only on Advanced Placement credit. The outcome variables show that 37 percent of the sample received a BA within 6 years after their first enrollment with an average time to degree of just over 4 years. Of those students, over 13 percent double majored. Two-thirds of students worked during their first year for an average of 24 hours per week. Also during their first year, students earned an average of 24 credits among those earning at least one. Nearly 10 percent were enrolled in graduate school during the final follow-up survey 6 years after beginning higher education. Section VI: Empirical Method This study relies on regression to assess the relationships between AP college course credits and college behaviors and outcomes. The basic estimating equation is: yy iiii = ββ 0 + ββ 1 AAAAAAAAAAAAAAAAAA iiii + XX iiii ββ + ΛΛ ss + εε iiii (1) In this equation, individual student i attends postsecondary institution s. The outcomes of interest, y, are sector and selectivity of institution, achievement, major, receipt of a bachelor s degree, total credits earned during the first year and throughout all of higher education, the number of advanced lab science and math classes taken, time to degree, and hours of paid work. The coefficient of interest is β 1 which describes the relationship between an additional AP college credit and each outcome. As earning AP college course credit is highly correlated to other measures of college success, I control for academic preparation and other student characteristics to the full extent of the data in vector X. BPS contains data on high school GPA, SAT scores, financial information, and demographics such as race and gender. I include institution fixed effects, capital lamda, to control for the host of institutional factors that are related to the outcomes thereby reducing bias and increasing precision. Results from a fixed effects model can be interpreted as the relationship between AP credits and the outcomes within institutions as the institution dummies account for variation across institutions. This is especially important in light of the fact that advanced credit policies differ by institution. When the outcome is binary, I use a linear probability model. Despite the rich set of covariates and the inclusion of institutional fixed effects, it is extremely challenging to control for the selection bias inherent in student decisions of AP class enrollment in high 12

13 school and college enrollment and persistence. Thus, I do not make causal claims about the relationship between AP credit and college outcomes as there may still be other unobserved variables that explain the link between AP credits and college outcomes causing bias in β 1. However, as the main goal of this analysis is to describe the ways in which students use advanced credit in college, a descriptive analysis is extremely insightful as we have little previous evidence about how college students choose to allocate their credit. Section VII: Results and Discussion The theory presented above suggests exploring specific outcomes related to the various ways students are able to use their advanced credits once they enroll in college. I discuss each outcome in turn, dividing them into the three categories of quality, quantity, and time allocation. Table 2 presents the full set of results from estimating equation (1). Each cell presents the coefficient on AP credits from a separate regression, and the outcomes are listed in the first column. Model 1 reports results from a univariate regression, Model 2 includes student level controls, and model 3 adds institution fixed effects. The preferred Model is model 3 as it includes the greatest number of controls and provides a within institution estimate of the relationship between AP credits and the outcomes. Quality Sector and Selectivity of Institution and Achievement I first examine if the reasons students take AP exams, improved institution and achievement, are valid. As shown in the first two outcomes of Table 2, AP credits are positively associated with enrolling in a four-year college relative to a two-year college and attending a moderately or very selective university. An additional AP credit is associated with four tenths of a percentage point increase in the probability of enrolling in a four-year college and half a percentage point increase in the likelihood of attending a selective institution after controlling for student characteristics. There is no variation within institution in sector or selectivity; hence, the Table reports no results for Model 3. This finding comports with the assertion from admission offices that they weight strength of high school curriculum in the admission decision and with student perceptions that taking more AP courses improves their college applications. Whether this finding confirms that admission offices use AP courses as a signal in the admission proves, however, is open to interpretation. Students might choose a selective school because it grants more AP credit rending suspect a causal interpretation of this result. However, it is unlikely that institutional endogeneity is a major factor in this estimation result because selective colleges are less likely to offer as many AP credits for the same AP exam score as less selective colleges. Still, there could be unobserved student characteristics that admission offices pick up on through letters of recommendation, extracurricular activities, and essays that are correlated with AP credits and explain the observed association. Achievement results demonstrate a positive association of AP credits with freshman GPA with each additional AP credit corresponding to a.014 improvement in GPA controlling for student characteristics and institution. This result supports Long, Conger, and Iatarola s (2012) findings which suggest that AP 13

14 courses improve subsequent academic performance. A related explanation and possible mechanism for the observed improvement in GPA is that students use the credits to reduce their courseload in their first year and spend more time on a smaller number of classes thereby increasing their chance of higher achievement in fewer credits. That hypothesis is not supported by the credits earned in the first year of college (the 8 th outcome in Table 2) because receiving an additional AP credit is associated with an increase in first year courseload of a tenth of a credit. Given the average student entering with AP credit has ten AP credits, the data show that those students take a full extra credit in the first year of college. Instead of taking fewer credits in their first and improving their performance, students with AP credit take more credits yet still experience higher achievement. Major Because STEM degrees often require more credits than other majors, the model predicts that students entering college with AP credit have an increased opportunity to select a STEM major. The data support this hypothesis as earning more AP credit is positively associated with selecting a STEM major. The average AP student with 10 AP credits is 5 percentage points more likely to be a STEM major representing a 33 percent increase over the baseline probability of being a STEM major. There is a definitive earnings payoff to a STEM degree, but it comes at the cost of a more time intensive major both in terms of credits and hours of time spent in class and studying (NSSE, 2011). For students who can reduce those costs by applying AP credits, STEM majors appear to be an attractive option. If students believe there is an earnings payoff to double majoring, then using their advanced credits to double major may be financially optimal relative to graduating early or spending their advanced credits in some other way. Among students who earn a BA, the data demonstrate a strong relationship between earning AP credit and double majoring with the average of 10 AP credits associated with an increase of seven percentage points in the likelihood of double majoring. This represents over a 50 percent increase in the probability of double majoring given the baseline of 13.6 percent. Advanced credit clearly eases students path to multiple majors, and many students are availing themselves of this opportunity. While more research on the returns to double majoring is necessary, the large investment of AP credits in double majoring suggests students believe diversify their knowledge and skill set benefits them either in the labor market or when applying to graduate school. Advanced Coursework Because AP credits obviate enrolling in many introductory courses, students may use their credits to take more advanced courses in certain subjects. I find that AP credits are associated with taking more advanced laboratory science and math courses. An additional 10 AP credits is associated with, on average, taking an additional third of an advanced math class. Although the point estimate for the number of advanced laboratory science courses is actually larger than for advanced math courses, it is imprecise due to fewer students taking advanced lab science courses overall. These results may indicate that students are using their AP credit to bypass introductory courses and take more advanced courses, but this effect could be entirely driven by the increase in STEM majors associated with AP credit. Quantity 14

15 Credits I examine both credits earned in the first year of enrollment and total credits earned throughout the first six years of undergraduate education. I exclude AP credit earned from both counts of credits so that these two outcomes measure only non-ap credits earned in college. The number of credits a student takes in the first year of college indicates whether students use AP credits to take a lighter course load in their first year of college. As discussed in the achievement section above, students with AP credit appear ambitious and take more credit in their 1 st year than students without AP credit. The counterfactual, what these students would have taken in the absence of receiving AP credit, is unclear. It is quite likely that these students are more highly motivated and excited about school and would have taken more credit even in the absence of earning AP credits. However, this finding does work against the leisure hypothesis in the first year. If students wanted to spend their AP credits to slack off in their first year of college, the expected finding would be the reverse of the empirical results. Total credits earned tells somewhat of a different story. After controlling for students backgrounds there is no statistically significant relationship between AP credits and total credits earned in the first six years of undergraduate education. The point estimate is about the same magnitude as for 1 st year credits but of the opposite sign and not significant. If the motivation story explains why AP credit is positively associated with first year credit, it does not explain the total credits result because the same students who were motivated to earn more credit in the first year would likely be more motivated to continue that pattern in subsequent years. Instead, students with AP credit do not continue to take additional credits in subsequent years and in fact must take less credit in subsequent years to lose the credit advantage gained in the first year. This logic suggests that students may front load their college curriculum with more credits so that they can reward themselves with fewer credits during their upperclassman years. It is worth noting that even though students with AP credit earn the same number of credits as students without AP credit while in college, they still graduate with more credit because of the additional AP credits added to the amount earned in college. Bachelor's Degree Students who earn AP credit are more likely to graduate with bachelor s degree within six years of starting college. Earning 10 AP credits is associated with a 4 percentage point increase in the probability of earning a BA. Several factors could play a role in this result. First, perhaps the Long, Conger, and Iatarola story holds and AP courses actually improve academic performance leading to better achievement and a higher likelihood to persist. The story could also be more complex. Students who earn AP credit take more credits during the first year of college but earn the same number of credits over the whole college career, suggesting they take fewer credits in the later college years. If the classes students take in their junior and senior years are more difficult, perhaps they can spend more time on them improving performance because they have fewer to take. While plausible, this story seems less compelling after considering most students drop out of college in the early years as opposed to their senior year. 15

16 Graduate Degree Pursuing graduate school can greatly increase the quantity of education attained. Model 3 of Table 2 shows a positive and significant relationship between AP credit and enrolling in graduate school with a magnitude of a six percentage point increase in the probability of attending graduate school for every 10 AP credits earned. This is, however, fairly weak evidence of students use of advanced credit. It is unlikely AP credits directly affect graduate school enrollment, and the causal mechanisms linking AP credits with graduate school are unclear. However, this finding could be the extension of the positive relationship between AP credits and taking advanced classes in science and mathematics if those courses serve as a positive signal to graduate admission offices. Time Allocation Time to Degree One of the primary ways in students might use their AP credit is to establish advance standing in their college and graduate earlier than they otherwise would. I explore time to degree among students who have completed on a BA by regressing the months from first enrollment to degree completion. When examining time to degree, it is important to keep in mind that there is an overrepresentation of students with AP credit as they are more likely to graduate with a BA as seen above. If students choose to use their advanced credit to reduce time to degree thereby reducing the cost of higher education, the coefficient on AP credits should be negative, and it is. The data demonstrate that students with the average number of AP credits, 10, are graduate almost a month earlier than students without any AP credit. If interpreted causally, this result states that advanced credit does reduce time to degree; however, it is possible that highly motivated students that take AP classes in high school would still graduate early even if they did not receive college credit for their exam scores. Even accounting for this caution, combining these results with the lack of any increase in total credits earned suggests that these highly motivated students decide to use their AP credit towards graduating early instead of staying in school and accumulating more credit. Reducing time to degree may be more important for students from modest financial backgrounds who cannot afford to spend as much money on higher education. Graduating early and saving a term of tuition may be more a greater motivation for them relative to richer students. I explore this possibility by interacting a dummy for the receipt of Title IV financial aid with AP credits and report the results in Table 3. Although the sign of the interaction term is negative, which would support this theory, the coefficient is small in magnitude and imprecisely measured. There is no evidence that lower income students are more motivated to use their AP credits to graduate early than other students with AP credit. Hours of Paid Work Students can reduce their loan burden and help finance their education by using their advanced credits to shift time away from taking courses towards hours of paid work, but it does not appear that students 16

17 do this. The evidence from BPS demonstrates a negative relationship between AP credit and working for pay with a 10 unit increase in credit associated with a decline of three-quarters of an hour of paid work in the first year of enrollment. Table 3 also reports an interaction with students on financial aid and AP credit to test whether lower income students are more likely to use their AP credit to shift time toward paid work. The point estimate on the interaction term is positive and significant in Models 1 and 2, but smaller and insignificant within institution. This may indicate that lower income students are more likely to use their AP credits for paid work, but that they sort into institutions that enable them to work more. In the context of the previous outcome of time to degree, perhaps a null finding on hours of paid work is not surprising. When given a choice between graduating early or taking fewer units, working, and graduating on time, it may be financially preferable to invest the time in coursework in an effort to graduate early to save money. Given the high tuition charges, it is unclear whether a student can earn enough by working during the few additional hours granted by AP credit to make up for graduating a term early. Leisure Time Theory suggests students might substitute other activities for coursework by using AP credits to take a lighter course load. They could spend more time on extracurricular activities or socializing with friends. Although BPS does not have accurate measures of students time use, the collection of outcomes examined above sheds some light on this question. The evidence for an increase in leisure time derives from the findings of the two credit outcomes. The fact that AP credits are not related to an increase in the total number of credits earned but are related to an increase in 1 st year credits earned suggests that students in the later years of college are taking fewer credits. The argument against an increase in leisure time is that AP credits are related to an increase in the pursuit of a STEM major and an increase in double majors, both of which require an increased time commitment. Furthermore, students are using their credits to graduate early and presumably entering the labor market earlier. Section VIII: Conclusion This paper proposes a conceptual model suggesting that Advanced Placement credit can affect three components of the higher education experience: the quantity of, quality of, and time allocation in postsecondary education. Empirical results from a nationally representative dataset suggest that students who earn AP credit are more likely to enroll in a four year, selective college and outperform their peers. Once entering college, students with college credit earned in high school are likely to put their credit to use in several valuable ways. Although they do not earn a noticeably larger amount of college credit, they are more likely to pursue a STEM major and double major than students without AP credit. They also use apply their AP credits to graduate earlier thereby reducing time to degree and limiting the direct costs of attending postsecondary education. The results do not support one prevailing theory in higher education: that college students are not challenging themselves academically. At least for high achieving students who earn AP credit, it 17

18 appears they invest their resources into academic activities such as double majoring, choosing a STEM major, and taking more advanced math classes or graduating early. These results have policy implications for several constituencies. First, they support the widespread adoption of college credit based programs in high school such as AP, IB, and DE. Earning college credit from these high school courses is related to improved college enrollment outcomes. Second, it suggests that institutions of higher education should continue awarding credit for college level courses taken in high school. Instead of wasting the credits, students appear to use them in a productive fashion that is likely beneficial to themselves, the institutions, and society. Finally, these conclusions support two state level policies currently being discussed. These findings support the advocates of encouraging faster time to degree by relying on college credits earned in high school and the state policies requiring their public institutions of higher education to accept AP and IB scores for college credit. 18

19 Table 1: Descriptive Statistics Variable Obs. Mean Std. Dev. Student Characteristics Female White Black Hispanic Asian Other Age Citizen Dad has BA Mom had BA Received Title IV Aid (1st year) Title IV Aid Amount (1st year) Took SAT or ACT Test Score (1600 Max) High School GPA Reported High School GPA Received Any AP Credit Number AP Credits Received Any IB Credit Number IB Credit First Institution Attended Characteristics Public 4 Year Private 4 Year For-profit 4 Year Public 2 Year For Profit 2 Year Other Selective Outcomes Received BA Within 6 Years Months Between 1st Enrollment and BA STEM Major Double Majored Worked for Pay in 1st Year Average Weekly Hours of Paid Work 1st Year Enrolled in Graduate School Took Any Advanced Lab Science Number of Advanced Lab Science Took Any Advanced Math Number of Advanced Math Received Any Credit 1st Year Number Credits 1st Year Total College Credits st Year GPA Notes: Observation values have been rounded to the nearest 10 in accordance with NCES restricted data use guidelines. 19

20 Table 2: Linear regression results showing the relationship between number of AP Credits awarded and college outcomes. Each cell contains the coefficient on Total AP Credits from a separate regression with the dependent variable in the first column. Outcome Model 1 Model 2 Model 3 Quality Four Year College Enrollment Moderately or Very Selective Institution *** (0.0028) *** (0.0031) 1st Year GPA *** (0.0027) STEM Major *** (0.0015) Double Major *** (cond. on BA) (0.0014) # Advanced Lab *** Science Classes (0.0182) # Advanced Math *** Classes (0.0087) Quantity Credits earned *** Year 1 (0.0478) Total credits *** earned years 1-6 (0.2379) Bachelor s Degree *** (0.0028) Enrolled in *** Graduate School (0.0020) Time Allocation Months from 1st *** enrollment to BA (0.0312) (cond. on BA) Hours worked per week *** (0.0659) *** (0.0012) *** (0.0014) *** (0.0019) *** (0.0015) *** (0.0015) *** (0.0167) *** (0.0083) *** (0.0352) (0.1431) *** (0.0014) *** (0.0018) ** (0.0287) *** (0.0443) N/A N/A *** (0.0022) ** (0.0019) *** (0.0015) (0.0221) *** (0.0088) ** (0.0329) (0.1347) *** (0.0013) ** (0.0019) ** (0.0304) * (0.0365) Students Controls X X Institution Fixed Effects X *** p< 0.001, ** p<0.01, *p<0.05 Standard errors are clustered at the institution level. Weighting done using the WTB000 weight. Binary outcomes reported using a linear probability model. Student controls include gender, race, citizenship status, age, Title IV aid, parents level of education, a categorical measure of high school GPA, and SAT or ACT score. 20