Essays on the economics of higher education




Denning, Jeffrey Todd

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This dissertation contains three chapters that examine the effect of price in higher education. The first chapter considers the effect of community college tuition on college enrollment using a natural experiment in Texas where discounts for community college tuition were expanded over time and across geography. Additionally, the long-term effects of community college are examined including transfer to universities and graduation with a bachelor's degree. This chapter uses Texas administrative data from 1994-2012 on the universe of high school graduates and their college enrollment and graduation. For high school graduates, community college enrollment in the first year after high school increased by 7.1 percentage points for a $1,000 decrease in tuition. Lower tuition also increased transfer from community colleges to universities. There is also marginally statistically significant evidence that attending a community college increased the probability of earning a bachelors degree within eight years of high school graduation by 23 percentage points. The second chapter examines whether students respond to immediate financial incentives when choosing their college major. From 2006-07 to 2010-11, low-income students in technical or foreign language majors could receive up to $8,000 in Federal Science and Mathematics Access to Retain Talent (SMART) Grants. Since income-eligibility was determined using a strict threshold, this chapter determines the causal impact of the grant on student major with a regression discontinuity design. Using administrative data from public universities in Texas, it is estimated that income-eligible students were 3.2 percentage points more likely than their ineligible peers to major in targeted fields. Brigham Young University had a larger impact of 10.1 percentage points. The third chapter considers the effect of financial aid arising from students being declared financially independent on educational outcomes including reenrollment, credits attempted, and graduation. Students who are 24 at the end of the calender year cannot be declared dependent while students who are 23 at the end of the year can be. This sharp change in eligibility is leveraged to compare dependent students to independent students in a regression discontinuity framework. The analysis uses administrative data from from all public universities and colleges in Texas from 2003-04 to 2013-14. Financial independence is associated with modest changes in educational outcomes.




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