The quality of college education is hard for students and employers to observe. Knowing this, colleges often change their names to signal higher quality while leaving other features unchanged. We study how these changes affect college choice and labor market performance of college graduates. Using administrative data, we show that name-changing colleges attract more qualified applicants, with larger effects among applicants who have less information about the college. Text from web discussion boards reveals many college applicants lack important information about colleges. A resume audit study shows employers possess nearly perfect information about how college name changes affect student aptitude.
Education; information; college choice; labor market returns; behavioral economics
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