Unintended consequences of free college: Self-selection into the teaching profession

Teacher quality is one of the most relevant factors influencing student learning. However, attracting and retaining skilled people to the teaching profession is challenging. In this paper, we study how making college tuition-free affects the pool of students pursuing a teaching career. We exploit the conjunction of two tuition-financing policies implemented in Chile: a scholarship introduced in 2011 for teaching majors, and a massive 2016 reform that made college tuition-free for students from households in the bottom 50% of the income distribution. We use the programs’ differences in timing and eligibility criteria to study the effects free college had on the self-selection of students into teaching programs. We find that free college decreased the relative returns to pursuing a teaching career, making it substantially less popular among relatively poor high-performing students who now self-select into programs with higher returns. We find that the reform reduced the academic qualifications of the pool of students entering the teaching programs, which can negatively affect long-term teacher quality.