IDEAS home Printed from https://ideas.repec.org/a/tpr/edfpol/v15y2020i3p428-456.html
   My bibliography  Save this article

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

Author

Listed:
  • Sarena Goodman

    (Division of Research and Statistics Board of Governors of the Federal Reserve System Washington, DC, 20551)

  • Alice Henriques Volz

    (Division of Research and Statistics Board of Governors of the Federal Reserve System Washington, DC, 20551)

Abstract

Between 2000 and 2010, U.S. public colleges and universities experienced widespread and uneven changes in funding from state and local appropriations. We find that over this period annual decreases in statewide appropriations led to lower public enrollment and higher for-profit enrollment (with no effect on enrollment overall), as well as increased student borrowing. In an analysis of mechanisms, we detect effects on spending, tuition, and capacity in the public sector. Altogether, the results reveal that core institutional resources affect the types of schools that students attend and yield new evidence of substitution between the public and for-profit sectors.

Suggested Citation

  • Sarena Goodman & Alice Henriques Volz, 2020. "Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education," Education Finance and Policy, MIT Press, vol. 15(3), pages 428-456, Summer.
    • Handle: RePEc:tpr:edfpol:v:15:y:2020:i:3:p:428-456
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/edfp_a_00281
    Download Restriction: Access to PDF is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas J. Kane, 2007. "Evaluating the Impact of the D.C. Tuition Assistance Grant Program," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
    2. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    3. Darolia, Rajeev, 2013. "Integrity versus access? The effect of federal financial aid availability on postsecondary enrollment," Journal of Public Economics, Elsevier, vol. 106(C), pages 101-114.
    4. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    5. Eric Bettinger & Oded Gurantz & Laura Kawano & Bruce Sacerdote, 2016. "The Long Run Impacts of Merit Aid: Evidence from California’s Cal Grant," NBER Working Papers 22347, National Bureau of Economic Research, Inc.
    6. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    7. David J. Deming & Claudia Goldin & Lawrence F. Katz, 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 139-164, Winter.
    8. John Bound & Breno Braga & Gaurav Khanna & Sarah Turner, 2020. "A Passage to America: University Funding and International Students," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 97-126, February.
    9. Brad R. Humphreys, 2000. "Do Business Cycles Affect State Appropriations to Higher Education?," Southern Economic Journal, John Wiley & Sons, vol. 67(2), pages 398-413, July.
    10. Levine, Phillip B. & Zimmerman, David J. (ed.), 2010. "Targeting Investments in Children," National Bureau of Economic Research Books, University of Chicago Press, number 9780226475813.
    11. Rajindar Koshal & Manjulika Koshal, 2000. "State Appropriation and Higher Education Tuition: What is the relationship?," Education Economics, Taylor & Francis Journals, vol. 8(1), pages 81-89.
    12. Jeffrey Clemens & Stephen Miran, 2012. "Fiscal Policy Multipliers on Subnational Government Spending," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 46-68, May.
    13. Stephanie Riegg Cellini, 2010. "Financial aid and for-profit colleges: Does aid encourage entry?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(3), pages 526-552.
    14. Webber, Douglas A., 2017. "State divestment and tuition at public institutions," Economics of Education Review, Elsevier, vol. 60(C), pages 1-4.
    15. Julian R. Betts & Laurel L. McFarland, 1995. "Safe Port in a Storm: The Impact of Labor Market Conditions on Community College Enrollments," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 741-765.
    16. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    17. Adam Looney & Constantine Yannelis, 2015. "A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 1-89.
    18. Jeffrey Clemens & Stephen Miran, 2012. "Fiscal Policy Multipliers on Subnational Government Spending," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 46-68, May.
    19. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
    20. Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
    21. Lang, Kevin & Weinstein, Russell, 2013. "The wage effects of not-for-profit and for-profit certifications: Better data, somewhat different results," Labour Economics, Elsevier, vol. 24(C), pages 230-243.
    22. David J. Deming & Noam Yuchtman & Amira Abulafi & Claudia Goldin & Lawrence F. Katz, 2016. "The Value of Postsecondary Credentials in the Labor Market: An Experimental Study," American Economic Review, American Economic Association, vol. 106(3), pages 778-806, March.
    23. Benjamin L. Castleman & Bridget Terry Long, 2016. "Looking beyond Enrollment: The Causal Effect of Need-Based Grants on College Access, Persistence, and Graduation," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1023-1073.
    24. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    25. Luis Armona & Rajashri Chakrabarti & Michael F. Lovenheim, 2018. "How Does For-profit College Attendance Affect Student Loans, Defaults and Labor Market Outcomes?," NBER Working Papers 25042, National Bureau of Economic Research, Inc.
    26. Bound, John & Turner, Sarah, 2007. "Cohort crowding: How resources affect collegiate attainment," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 877-899, June.
    27. Eric P. Bettinger & Bridget Terry Long, 2010. "Does Cheaper Mean Better? The Impact of Using Adjunct Instructors on Student Outcomes," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 598-613, August.
    28. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    29. Chung, Anna S., 2012. "Choice of for-profit college," Economics of Education Review, Elsevier, vol. 31(6), pages 1084-1101.
    30. Sarah R. Cohodes & Joshua S. Goodman, 2014. "Merit Aid, College Quality, and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 251-285, October.
    31. Cellini, Stephanie Riegg, 2012. "For-Profit Higher Education: An Assessment of Costs and Benefits," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 153-179, March.
    32. Phillip B. Levine & David J. Zimmerman, 2010. "Introduction to "Targeting Investments in Children: Fighting Poverty When Resources are Limited"," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources Are Limited, pages 3-11, National Bureau of Economic Research, Inc.
    33. Brown, Jeffrey R. & Hoxby, Caroline M. (ed.), 2015. "How the Financial Crisis and Great Recession Affected Higher Education," National Bureau of Economic Research Books, University of Chicago Press, number 9780226201832.
    34. Gicheva, Dora, 2016. "Student loans or marriage? A look at the highly educated," Economics of Education Review, Elsevier, vol. 53(C), pages 207-216.
    35. Dettling, Lisa J. & Hsu, Joanne W., 2018. "Returning to the nest: Debt and parental co-residence among young adults," Labour Economics, Elsevier, vol. 54(C), pages 225-236.
    36. 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.
    37. repec:hal:pseose:halshs-01155638 is not listed on IDEAS
    38. Stephanie Riegg Cellini, 2009. "Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 1-30, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Schanzenbach, Diane W. & Turner, Sarah, 2022. "Limited supply and lagging enrollment: Production technologies and enrollment changes at community colleges during the pandemic," Journal of Public Economics, Elsevier, vol. 212(C).
    2. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    3. Liu, Kaiqi & Rusch, Hannes & Seel, Christian & Terstiege, Stefan, 2024. "Competition in Higher Education: Sorting, Ranking and Fees," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. Berrak Bahadir & Dora Gicheva, 2022. "Macroeconomic Implications of Student Debt: A State‐Level Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2273-2300, December.
    5. Lisa J. Dettling & Sarena Goodman & Sarah Reber, 2022. "Saving and Wealth Accumulation among Student Loan Borrowers: Implications for Retirement Preparedness," Finance and Economics Discussion Series 2022-019, Board of Governors of the Federal Reserve System (U.S.).
    6. Ciprian Domnisoru & Ioana Cosmina Schiopu, 2021. "The Rise of For-Profit Higher Education: A General Equilibrium Analysis," CESifo Working Paper Series 9134, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    2. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    3. Stephanie Riegg Cellini & Rajeev Darolia, 2017. "High Costs, Low Resources, and Missing Information: Explaining Student Borrowing in the For-Profit Sector," The ANNALS of the American Academy of Political and Social Science, , vol. 671(1), pages 92-112, May.
    4. Lau, Christopher V., 2020. "Are federal student loan accountability regulations effective?," Economics of Education Review, Elsevier, vol. 75(C).
    5. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.
    6. Gregory Gilpin & Michael Kofoed, 2020. "Employer-Sponsored Education Assistance and Graduate Program Choice, Cost, and Finance," Research in Higher Education, Springer;Association for Institutional Research, vol. 61(4), pages 431-458, June.
    7. Luis Armona & Rajashri Chakrabarti & Michael F. Lovenheim, 2018. "How Does For-profit College Attendance Affect Student Loans, Defaults and Labor Market Outcomes?," NBER Working Papers 25042, National Bureau of Economic Research, Inc.
    8. Goodman, Sarena & Isen, Adam & Yannelis, Constantine, 2021. "A day late and a dollar short: Liquidity and household formation among student borrowers," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1301-1323.
    9. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    10. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    11. Gilpin, Gregory A. & Saunders, Joseph & Stoddard, Christiana, 2015. "Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes," Economics of Education Review, Elsevier, vol. 45(C), pages 53-63.
    12. Stephanie Riegg Cellini & Nicholas Turner, 2019. "Gainfully Employed?: Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 342-370.
    13. Webber, Douglas A., 2017. "Risk-sharing and student loan policy: Consequences for students and institutions," Economics of Education Review, Elsevier, vol. 57(C), pages 1-9.
    14. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    15. Andrew Foote & Michel Grosz, 2020. "The Effect of Local Labor Market Downturns on Postsecondary Enrollment and Program Choice," Education Finance and Policy, MIT Press, vol. 15(4), pages 593-622, Fall.
    16. Rajeev Darolia, 2013. "Student Loan Repayment and College Accountability," Consumer Finance Institute discussion papers 13-5, Federal Reserve Bank of Philadelphia.
    17. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    18. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    19. Christopher Jepsen & Peter Mueser & Kenneth Troske & Kyung-Seong Jeon, 2021. "The Benefits of Alternatives to Conventional College: Comparing the Labor-Market Returns to For-Profit Schools and Community Colleges," CESifo Working Paper Series 9272, CESifo.
    20. Gaulke, Amanda P., 2021. "Post-Schooling off-The-Job training and its benefits," Labour Economics, Elsevier, vol. 70(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:edfpol:v:15:y:2020:i:3:p:428-456. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The MIT Press (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.