Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Do Public Subsidies Promote College Access and Completion? Evidence from Community College Taxing Districts

Friday, November 13, 2015 : 10:55 AM
Tequesta (Hyatt Regency Miami)

*Names in bold indicate Presenter

Paco Martorell1, Issac McFarlin2 and Brian McCall2, (1)University of California, Davis, (2)University of Michigan
Governments spend heavily on public higher education to make college affordable. In 2012, state appropriations to public colleges and universities exceeded $72 billion, allowing public institutions to keep college sticker tuition price lower for all students. Despite the magnitude of these expenditures, there exists little credible evidence on the causal impact of across-the-board tuition subsidies on college entry or college attainment. We exploit variation in tuition subsidies brought about by expansions in local college taxing district boundaries to isolate the impact of across-the-board tuition subsidies. Community college taxing districts are local jurisdictions that support public community colleges. In-district residents pay property taxes and face much lower tuition than individuals not living in college taxing districts. Preliminary event history analysis shows that Texas high school graduate cohorts exposed to taxing districts are more likely to attend community college immediately after high school compared to earlier cohorts of high school graduates from the same school district that are not exposed. The estimated effects are large, positive and statistically significant. Our effects are similar across students of varying economic status and measured ability. Moreover, we find little indication that students substitute away from public four-year colleges.

In ongoing analyses, we are conducting analyses exploiting variation across taxing districts in the tuition subsidies they offer as well as using taxing districts which attempted to expand, but were unsuccessful in doing so, as “placebo” treatments. We are also examining impacts on ever enrolling in college as well as attainment of college degrees and credits. Finally, we will conduct analyses to distinguish between the impact of tuition differences and changes in college supply associated with taxing district expansions.