Association for Public Policy Analysis & Management

Economists have long been interested in understanding the effect of across-the-board tuition subsidies on college enrollment. One challenge for identifying the effects of tuition subsidies is that tuition price is endogenously determined. A second challenge is accurately measuring the tuition prices individuals face when making decisions to attend college. We exploit community college taxing district boundaries that generate sharp spatial variation in community college price, where in-district residents are offered tuition subsidies for attending the local community college and individuals who do not live in college districts face the full tuition sticker price. To distinguish the effect of tuition subsidies, we incorporate restricted-access data that precisely characterizes individual residential locations with an empirical strategy that compares the college enrollment rates of individuals within school districts who live inside and outside college districts. Using several alternative estimation techniques including geographical regression discontinuity design and data from the 2000 Census and the 2001-2016 American Community Survey, we estimate the effects of tuition subsidies on the probability of attending a public post-secondary institution. Preliminary results suggest that an increase in tuition subsidies have a statistically significant positive effect on the probability of attending a public post-secondary institution. There is also some indication that effect sizes vary with income where higher-income youth are slightly more responsive to tuition subsidies than lower-income youth.