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

FEDS Working Paper No. 2015-025

https://doi.org/10.17016/FEDS.2015.025r1

56 Pages Posted: 5 May 2015

See all articles by Sarena Goodman

Sarena Goodman

Board of Governors of the Federal Reserve System

Alice Henriques Volz

Board of Governors of the Federal Reserve System

Date Written: October 2015

Abstract

Between 2000 and 2010, U.S. public postsecondary schools experienced widespread and uneven changes in funding from state and local appropriations. We estimate that statewide funding cuts lead to a decrease in public attendance that is offset by an increase in for-profit attendance, with no change in overall enrollment rates. We document a corresponding increase in borrowing, driven by both a shift in attendance toward a higher-borrowing sector and public institutions price adjusting to offset losses in revenue. Finally, we examine potential channels underlying these results and detect meaningful changes in public universities’ tuition, faculty, and competitive admissions slots.

Keywords: enrollment, for-profit colleges, public colleges, state appropriations

JEL Classification: H44, H75, I21, I22, J24

Suggested Citation

Goodman, Sarena and Henriques Volz, Alice, Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Changes in Appropriations for Higher Education (October 2015). FEDS Working Paper No. 2015-025, https://doi.org/10.17016/FEDS.2015.025r1, Available at SSRN: https://ssrn.com/abstract=2602897 or http://dx.doi.org/10.2139/ssrn.2602897

Sarena Goodman

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Alice Henriques Volz (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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