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Market Structure and College Access in the US

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  • Emily E. Cook
  • Emily Cook

Abstract

State governments provide grants to students to subsidize college attendance. In response, colleges can adjust their tuition, aid policies, and admission standards, affecting equilibrium enrollment and pass-through of aid to students. To quantify demand- and supply-side responses, I develop a model that incorporates the geographic nature of the market and strategic competition between individual colleges. Simulations demonstrate that college responses are meaningful: when students receive $1,000 to attend in-state public colleges, these colleges absorb over 40% of the subsidy on average and raise admissions standards, reducing the enrollment effect of the policy. Close competitors see enrollment declines of 2-3%.

Suggested Citation

  • Emily E. Cook & Emily Cook, 2025. "Market Structure and College Access in the US," CESifo Working Paper Series 11733, CESifo.
    • Handle: RePEc:ces:ceswps:_11733
    as

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    File URL: https://www.ifo.de/DocDL/cesifo1_wp11733.pdf
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    References listed on IDEAS

    as
    1. Jessica S. Howell, 2010. "Assessing the Impact of Eliminating Affirmative Action in Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 113-166, January.
    2. Epple, Dennis & Romano, Richard & Sarpça, Sinan & Sieg, Holger, 2017. "A general equilibrium analysis of state and private colleges and access to higher education in the U.S," Journal of Public Economics, Elsevier, vol. 155(C), pages 164-178.
    3. Stephanie Riegg Cellini & Claudia Goldin, 2014. "Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 174-206, November.
    4. Turner, Nicholas, 2012. "Who benefits from student aid? The economic incidence of tax-based federal student aid," Economics of Education Review, Elsevier, vol. 31(4), pages 463-481.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    college choice; college admission; college enrollment; financial aid; mixed oligopoly; non-profit firms; demand estimation;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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