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Can Online Learning Bend the Higher Education Cost Curve?

Author

Listed:
  • David J. Deming
  • Claudia Goldin
  • Lawrence F. Katz
  • Noam Yuchtman

Abstract

We examine whether online learning technologies have led to lower prices in higher education. Using data from the Integrated Postsecondary Education Data System, we show that online education is concentrated in large for-profit chains and less-selective public institutions. We find that colleges with a higher share of online students charge lower tuition prices. We present evidence of declining real and relative prices for full-time undergraduate online education from 2006 to 2013. Although the pattern of results suggests some hope that online technology can "bend the cost curve" in higher education, the impact of online learning on education quality remains uncertain.

Suggested Citation

  • David J. Deming & Claudia Goldin & Lawrence F. Katz & Noam Yuchtman, 2015. "Can Online Learning Bend the Higher Education Cost Curve?," American Economic Review, American Economic Association, vol. 105(5), pages 496-501, May.
  • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:496-501
    Note: DOI: 10.1257/aer.p20151024
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    References listed on IDEAS

    as
    1. David J. Deming & Noam Yuchtman & Amira Abulafi & Claudia Goldin & Lawrence F. Katz, 2016. "The Value of Postsecondary Credentials in the Labor Market: An Experimental Study," American Economic Review, American Economic Association, vol. 106(3), pages 778-806, March.
    2. David J. Deming & Claudia Goldin & Lawrence F. Katz, 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 139-164, Winter.
    3. William G. Bowen & Matthew M. Chingos & Kelly A. Lack & Thomas I. Nygren, 2014. "Interactive Learning Online at Public Universities: Evidence from a Six‐Campus Randomized Trial," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 33(1), pages 94-111, January.
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    Cited by:

    1. Benjamin Faber & Rosa Sanchis-Guarner & Felix Weinhardt, 2015. "ICT and Education: Evidence from Student Home Addresses," SERC Discussion Papers 0186, Spatial Economics Research Centre, LSE.
    2. Steven W. Hemelt & Kevin M. Stange & Fernando Furquim & Andrew Simon & John E. Sawyer, 2018. "Why is Math Cheaper than English? Understanding Cost Differences in Higher Education," NBER Working Papers 25314, National Bureau of Economic Research, Inc.
    3. Lykopoulou Zacharoula, 2020. "Education Management And The Impact Of Innovation," Entrepreneurship, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 8(2), pages 183-196.
    4. Lykopoulou Zacharoula, 2020. "Innovation In Managing Educational Services," Entrepreneurship, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 8(2), pages 71-85.
    5. Rosa Sanchis-Guarner & José Montalbán & Felix Weinhardt, 2021. "Home Broadband and Human Capital Formation," CESifo Working Paper Series 8846, CESifo.
    6. Joshua Goodman & Julia Melkers & Amanda Pallais, 2019. "Can Online Delivery Increase Access to Education?," Journal of Labor Economics, University of Chicago Press, vol. 37(1), pages 1-34.
    7. Lynne Pepall & Dan Richard, 2014. "Competition, Selectivity and Innovation in the Higher Educational Market," Discussion Papers Series, Department of Economics, Tufts University 0782, Department of Economics, Tufts University.
    8. Doyle, William R. & Skinner, Benjamin T., 2016. "Estimating the education-earnings equation using geographic variation," Economics of Education Review, Elsevier, vol. 53(C), pages 254-267.
    9. Denning, Jeffrey T. & Eide, Eric R. & Warnick, Merrill, 2019. "Why Have College Completion Rates Increased?," IZA Discussion Papers 12411, Institute of Labor Economics (IZA).
    10. Tong, Tingting & Li, Haizheng, 2018. "Demand for MOOC - An Application of Big Data," China Economic Review, Elsevier, vol. 51(C), pages 194-207.
    11. Caroline M. Hoxby, 2017. "Online Postsecondary Education and Labor Productivity," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 401-460, National Bureau of Economic Research, Inc.
    12. Nick Huntington-Klein & James Cowan & Dan Goldhaber, 2017. "Selection into Online Community College Courses and Their Effects on Persistence," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(3), pages 244-269, May.
    13. Cacault, M. Paula & Hildebrand, Christian & Laurent-Lucchetti, Jérémy & Pellizzari, Michele, 2019. "Distance Learning in Higher Education: Evidence from a Randomized Experiment," IZA Discussion Papers 12298, Institute of Labor Economics (IZA).
    14. Gilbert E. Metcalf & James Stock, 2015. "The Role of Integrated Assessment Models in Climate Policy: A User's Guide and Assessment," Discussion Papers Series, Department of Economics, Tufts University 0811, Department of Economics, Tufts University.
    15. Lykopoulou Zacharoula, 2019. "Innovate Practices In Education Management In Greece," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 16(2), pages 141-156.
    16. Justin C. Ortagus & Lijing Yang, 2018. "An Examination of the Influence of Decreases in State Appropriations on Online Enrollment at Public Universities," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(7), pages 847-865, November.
    17. Benjamin T. Skinner, 2019. "Making the Connection: Broadband Access and Online Course Enrollment at Public Open Admissions Institutions," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(7), pages 960-999, November.
    18. Michael S. McPherson & Lawrence S. Bacow, 2015. "Online Higher Education: Beyond the Hype Cycle," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 135-154, Fall.
    19. Eric P. Chiang & Jose J. Vazquez, 2018. "Using Technology to Complete the Natural Learning Path in a Principles of Economics Course," Journal of Economics Teaching, Journal of Economics Teaching, vol. 2(2), pages 104-114, January.
    20. Justin C. Ortagus, 2018. "National Evidence of the Impact of First-Year Online Enrollment on Postsecondary Students’ Long-Term Academic Outcomes," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(8), pages 1035-1058, December.
    21. Jacqmin, Julien, 2019. "Providing MOOCs: A FUN way to enroll students?," Information Economics and Policy, Elsevier, vol. 48(C), pages 32-39.
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    23. Rachel Baker & Brent Evans & Qiujie Li & Bianca Cung, 2019. "Does Inducing Students to Schedule Lecture Watching in Online Classes Improve Their Academic Performance? An Experimental Analysis of a Time Management Intervention," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(4), pages 521-552, June.

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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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