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Tuition Increases and University Behavior: Theory and Evidence on Student Enrollment

Author

Listed:
  • Katherine Cuff

    (McMaster University)

  • Ana Gamarra Rondinel

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • A. Abigail Payne

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper considers the role universities play in determining their enrollment when faced with government regulated domestic tuition. Our theoretical framework posits that domestic student enrollment increase and international student enrollment decrease or remain unchanged when domestic tuition increases. Using 30 years of data, we find higher tuition increases domestic enrollment, mediated by an expectation that students may respond negatively to increased tuition. Universities shift enrollment toward higher-revenue fields. The results for international student enrollment is mixed, depending on the research intensity of the university.

Suggested Citation

  • Katherine Cuff & Ana Gamarra Rondinel & A. Abigail Payne, 2025. "Tuition Increases and University Behavior: Theory and Evidence on Student Enrollment," Melbourne Institute Working Paper Series wp2025n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2025n06
    as

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    File URL: https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0008/5351390/wp2025no6.pdf
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    References listed on IDEAS

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    Cited by:

    1. Katherine Cuff & Ana Gamarra Rondinel & A. Abigail Payne, 2025. "Gender Differences in University Enrollment and STEM Major: The Role of Tuition Policy in Australia," CESifo Working Paper Series 12141, CESifo.

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    Keywords

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    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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