Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College? / Thomas J. Kane.

Format:

Book

Author/Creator:

Kane, Thomas J.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5164.

NBER working paper series no. w5164

Language:

English

Subjects (All):

College costs--United States--Econometric models.

College costs.

College attendance--United States--Econometric models.

College attendance.

Federal aid to higher education--United States--Econometric models.

Federal aid to higher education.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1995.

Summary:

Though economists have spent the past decade analyzing the rising payoff to schooling, we know much less about the responses of youth or the effectiveness of policies aimed at influencing those decisions. States and the federal government currently spend more than $53 billion annually, hoping to promote greater access to college. This paper evaluates the price sensitivity of youth, using several sources of non-experimental variation in costs. The bulk of the evidence points to large enrollment impacts, particularly for low-income students and for those attending two-year colleges. The states have chosen to promote college enrollment by keeping tuition low through across-the-board subsidies rather than using more targeted, means-tested aid. As public enrollments increase, this has become an expensive strategy. Means-tested aid may be better targeted. However, the evidence of enrollment responses to such targeted aid is much weaker. After a federal means-tested grant program was established in 1973, there was no disproportionate increase in enrollment by low-income youth. Given the number of public dollars at stake, the two sets of results should be reconciled.

Notes:

July 1995.

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