Lifting the Cap on Non-Resident University Enrollment: Evidence from Wisconsin

Non-resident students are often accused of negatively affecting academic quality and crowding out resident students. We present new evidence on this relationship by exploiting the removal of an enrollment cap on non-resident students at a highly ranked state flagship university. We find this policy yielded a 29 percent increase in non-resident enrollment (coming almost entirely from domestic—rather than international—students), and a consequent 47 percent increase in tuition revenue which funded large increases in financial aid disbursed at the university, particularly for low-income resident students. We find no evidence of negative effects on several measures of academic quality or resident-student enrollment.