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Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education

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  • Sarena Goodman

    (Division of Research and Statistics Board of Governors of the Federal Reserve System Washington, DC, 20551)

  • Alice Henriques Volz

    (Division of Research and Statistics Board of Governors of the Federal Reserve System Washington, DC, 20551)

Abstract

Between 2000 and 2010, U.S. public colleges and universities experienced widespread and uneven changes in funding from state and local appropriations. We find that over this period annual decreases in statewide appropriations led to lower public enrollment and higher for-profit enrollment (with no effect on enrollment overall), as well as increased student borrowing. In an analysis of mechanisms, we detect effects on spending, tuition, and capacity in the public sector. Altogether, the results reveal that core institutional resources affect the types of schools that students attend and yield new evidence of substitution between the public and for-profit sectors.

Suggested Citation

  • Sarena Goodman & Alice Henriques Volz, 2020. "Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education," Education Finance and Policy, MIT Press, vol. 15(3), pages 428-456, Summer.
    • Handle: RePEc:tpr:edfpol:v:15:y:2020:i:3:p:428-456
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    Cited by:

    1. Schanzenbach, Diane W. & Turner, Sarah, 2022. "Limited supply and lagging enrollment: Production technologies and enrollment changes at community colleges during the pandemic," Journal of Public Economics, Elsevier, vol. 212(C).
    2. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    3. Liu, Kaiqi & Rusch, Hannes & Seel, Christian & Terstiege, Stefan, 2024. "Competition in Higher Education: Sorting, Ranking and Fees," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. Berrak Bahadir & Dora Gicheva, 2022. "Macroeconomic Implications of Student Debt: A State‐Level Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2273-2300, December.
    5. Lisa J. Dettling & Sarena Goodman & Sarah Reber, 2022. "Saving and Wealth Accumulation among Student Loan Borrowers: Implications for Retirement Preparedness," Finance and Economics Discussion Series 2022-019, Board of Governors of the Federal Reserve System (U.S.).
    6. Ciprian Domnisoru & Ioana Cosmina Schiopu, 2021. "The Rise of For-Profit Higher Education: A General Equilibrium Analysis," CESifo Working Paper Series 9134, CESifo.

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