Information

Information

Information about programs is crucial for students, the policy maker, and the economy as a whole. Students cannot choose “good” programs unless they know program characteristics and outcomes. The policy maker cannot oversee and regulate the sector without knowing how it performs. The economy cannot obtain the advanced skills it needs unless those who supply them (that is, higher education students) know which skills are demanded in the labor market. Suppose, for example, that the labor market needs data scientists more than tourism managers. In a well-functioning market, data scientists would command higher salaries than tourism managers. Armed with this information, at least some students would become data scientists. Without salary information, too many students might become tourism managers. In this scenario, neither would students obtain the highest possible salary nor would firms obtain the required skills—a “lose-lose” situation. Information is thus critical to a good functioning of the education and labor markets.

In LAC, the vast dispersion in returns to SCPs and bachelor’s programs, as well as the persistent SCP stigma, indicates that students are likely ignorant of the good average outcomes of SCPs, particularly relative to an incomplete bachelor’s program. Even if they know such outcomes, they may believe they would actually graduate from a bachelor’s program should they enroll in one. Students, however, should be familiar with some key facts when making their decisions: in LAC, the chances of completing a bachelor’s program are less than 50 percent (chapter 1); they are lower for low-income, poorly prepared students than for others;3 and not all bachelor’s graduates fare better than SCP graduates (chapter 2). Further, students may ignore not just programs’ returns but also their content. It is easy to imagine what an accountant does, but not necessarily what a cybersecurity specialist or a logistics technician does.

These issues are all the more serious in LAC, where students choose a higher education major right at the beginning of their studies (chapter 1). While switching majors is possible, it involves starting the new one almost from scratch, as credits do not transfer easily among majors owing to a lack of general education classes. Also, students in LAC typically attend higher education only once in their lifetime. As a result, most students make the high-stakes choice of a major only once, when they are very young. Lack of information about the programs’ content and returns as well as unrealistic perceptions of their readiness for the various programs can certainly lead students to make poor choices. Mitigating these problems requires that students gain access to program-level information, including program content, costs and funding options, average labor market outcomes, background characteristics of the average graduate (for example, average academic readiness), and requirements for student success (for example, a strong math background). Based on this information, students should be able to assess their readiness and fit for the program. Program-level information should be made available in high school—at least two or three years before graduation— for the students to have enough time to make these important choices. The information should reach not only students but also the families, who might make

considerable financial sacrifices on their children’s behalf, and the high school teachers, who know the students and can help them process the information. Information processing is particularly important because students might experience an information overload owing to excessive information or might not know how to interpret information, particularly in the case of students with less educated parents.

Choosing the program-level outcomes and metrics to report is not straightforward. Several are possible, including graduation rate, time-to-degree, learning achievement (for example, scores in an exit or licensing exam), shortterm labor market outcomes, long-term labor market outcomes, and value-added contributions to one or several of these outcomes. Some of these metrics can be manipulated quite easily. A program can, for instance, lower graduation standards in order to raise graduation rates. From this perspective, labor market outcomes are preferable, as are learning outcomes certified by a third party (for example, test scores in a national exit exam). Among labor market outcomes, however, short- and long-term outcomes may paint different pictures. For instance, a program may provide better employment prospects right after graduation than 10 or 15 years later. More generally, different metrics may be at odds with each other, as documented by Ferreyra et al. (2020) for Colombia in their background paper for this book, and by others for the United States and LAC.4 To a certain extent, what information is reported depends on what is available. Yet, even if all possible outcomes and metrics were available and reported, students might still need assistance interpreting them.

Because of their simplicity and ease of interpretation, rankings are an appealing way to present program-level information. But, for the same reasons described in the previous paragraph, rankings can be easily altered by choosing different metrics. Even if one built an index of multiple indicators (such as various academic and labor market outcomes) and constructed a ranking based on it, the ranking would be sensitive to the weight given to each indicator in the index. Precisely because rankings do affect the behavior of HEIs and students alike,5 policy makers should refrain from building them. Whereas third parties might build rankings, students should at least be aware of their content and pitfalls.6

An important question, of course, is who would provide the program-level information underpinning all information-related policies. Building this information requires student-level data on wages, employment, and higher education program completed. In countries such as Chile and Peru, the governments collect the relevant information and make it publicly available, at the program level, on a website. However, this is rare in the rest of LAC. The relevant data typically come from multiple government agencies (for example, the ministries of education and labor) and is therefore subject to substantial coordination problems. Indeed, the team preparing this book encountered multiple instances of these problems. Many countries do not collect the information at all, and some that do choose not to report it, either at the program or HEI level.

Governments have a natural advantage in collecting the relevant information because they can enforce HEIs’ obligation to report it and can solve the