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Federal policies, state responses, and community college outcomes: Testing an augmented Bennett hypothesis

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  • Frederick, Allison B.
  • Schmidt, Stephen J.
  • Davis, Lewis S.

Abstract

We estimate the impact of increases in Federal student aid and higher education funding, such as the recently proposed American Graduation Initiative (AGI), on the outcomes of community colleges, including enrollments, list and average tuitions, and educational quality. We develop a reduced form model of state-level education policy in which state policy makers, who have objectives that differ from those of Federal policy makers, respond to changes in Federal policies. Our empirical specification treats state and institutional variables as endogenous; we interpret the coefficients as measuring the responses of state and institution officials to changes in Federal policies. We simulate the effects of AGI and find little evidence that states recapture Federal education resources. AGI would have a significant effect on educational quality but a limited effect on enrollments. An equivalent increase in Federal student aid would have greater impact on access and enrollments, but decrease educational quality.

Suggested Citation

  • Frederick, Allison B. & Schmidt, Stephen J. & Davis, Lewis S., 2012. "Federal policies, state responses, and community college outcomes: Testing an augmented Bennett hypothesis," Economics of Education Review, Elsevier, vol. 31(6), pages 908-917.
    • Handle: RePEc:eee:ecoedu:v:31:y:2012:i:6:p:908-917
    DOI: 10.1016/j.econedurev.2012.05.009
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    References listed on IDEAS

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    1. Berger, Mark C. & Kostal, Thomas, 2002. "Financial resources, regulation, and enrollment in US public higher education," Economics of Education Review, Elsevier, vol. 21(2), pages 101-110, April.
    2. Julian R. Betts & Laurel L. McFarland, 1995. "Safe Port in a Storm: The Impact of Labor Market Conditions on Community College Enrollments," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 741-765.
    3. Harris Dellas & Plutarchos Sakellaris, 2003. "On the cyclicality of schooling: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 148-172, January.
    4. Thomas J. Kane & Cecilia Elena Rouse, 1999. "The Community College: Educating Students at the Margin between College and Work," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 63-84, Winter.
    5. Singell, Larry Jr. & Stone, Joe A., 2007. "For whom the Pell tolls: The response of university tuition to federal grants-in-aid," Economics of Education Review, Elsevier, vol. 26(3), pages 285-295, June.
    6. Grubb, W. Norton, 2002. "Learning and earning in the middle, part I: national studies of pre-baccalaureate education," Economics of Education Review, Elsevier, vol. 21(4), pages 299-321, August.
    7. Bridget Terry Long, 2004. "How do Financial Aid Policies Affect Colleges?: The Institutional Impact of the Georgia HOPE Scholarship," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
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    Cited by:

    1. Carlos Hoyos-Pontón & Alexander Villarraga-Orjuela, 2020. "Impactos del programa Ser Pilo Paga en los precios de matrícula de una muestra de universidades acreditadas en Colombia," Documentos Departamento de Economía 18142, Universidad del Norte.
    2. Alla Fridman & Alexey Verbetsky, 2017. "Universities' competition under dual tuition system," Economics Bulletin, AccessEcon, vol. 37(3), pages 2122-2132.
    3. Grey Gordon & Aaron Hedlund, 2017. "Accounting for the Rise in College Tuition," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 357-394, National Bureau of Economic Research, Inc.
    4. Kolpin, Van & Stater, Mark, 2024. "The perverse equilibrium effects of state and federal student aid in higher education," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 679-691.
    5. Fridman, A. & Verbetskaia, M., 2020. "Government regulation of the market for higher education," Journal of the New Economic Association, New Economic Association, vol. 45(1), pages 12-43.
    6. Aaron Hedlund & Grey Gordon, 2017. "Accounting for Tuition Increases at U.S. Colleges," 2017 Meeting Papers 1550, Society for Economic Dynamics.

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    More about this item

    Keywords

    Demand for schooling; Educational finance; Expenditures; Grants; State and Federal aid;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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