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Spatial Variation in Higher Education Financing and the Supply of College Graduates

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  • John Kennan

Abstract

In the U.S. there are large differences across States in the extent to which college education is subsidized, and there are also large differences across States in the proportion of college graduates in the labor force. State subsidies are apparently motivated in part by the perceived benefits of having a more educated workforce. The paper extends the migration model of Kennan and Walker (2011) to analyze how geographical variation in college education subsidies affects the migration decisions of college graduates. The model is estimated using NLSY data, and used to quantify the sensitivity of migration and college enrollment decisions to differences in expected net lifetime income, focusing on how cross-State differences in public college financing affect the educational composition of the labor force. The main finding is that these differences have substantial effects on college enrollment, and that these effects are not dissipated through migration.

Suggested Citation

  • John Kennan, 2015. "Spatial Variation in Higher Education Financing and the Supply of College Graduates," NBER Working Papers 21065, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21065
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    References listed on IDEAS

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    9. Claudia Goldin & Lawrence F. Katz, 1999. "The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 37-62, Winter.
    10. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    11. David Card & Thomas Lemieux, 2001. "Dropout and Enrollment Trends in the Postwar Period: What Went Wrong in the 1970s?," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 439-482, National Bureau of Economic Research, Inc.
    12. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 629-662, September.
    13. Bound, John & Groen, Jeffrey & Kezdi, G.Gabor & Turner, Sarah, 2004. "Trade in university training: cross-state variation in the production and stock of college-educated labor," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 143-173.
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    Cited by:

    1. 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.
    2. Chao Fu & Shoya Ishimaru & John Kennan, 2024. "Government Expenditure on the Public Education System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 43-73, February.
    3. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 184-224, October.
    4. Francesconi, Marco & Slonimczyk, Fabian & Yurko, Anna, 2017. "Moving On Up for High School Graduates in Russia: The Consequences of the Uni ed State Exam Reform," CEPR Discussion Papers 11996, C.E.P.R. Discussion Papers.
    5. Michael Amior & Alan Manning, 2018. "The Persistence of Local Joblessness," American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
    6. Brian Knight & Nathan Schiff, 2019. "The Out-of-State Tuition Distortion," American Economic Journal: Economic Policy, American Economic Association, vol. 11(1), pages 317-350, February.
    7. Michael Amior, 2015. "Why are Higher Skilled Workers More Mobile Geographically? The Role of the Job Surplus," CEP Discussion Papers dp1338, Centre for Economic Performance, LSE.
    8. Michael Amior, 2024. "Education and Geographical Mobility: The Role of the Job Surplus," American Economic Journal: Economic Policy, American Economic Association, vol. 16(4), pages 341-381, November.
    9. John V. Winters, 2020. "In-State College Enrollment and Later Life Location Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 55(4), pages 1400-1426.
    10. John Kennan, 2016. "Open Borders in the European Union and Beyond: Migration Flows and Labor Market Implications," 2016 Meeting Papers 1359, Society for Economic Dynamics.
    11. Francesconi, Marco & Slonimczyk, Fabián & Yurko, Anna, 2019. "Democratizing access to higher education in Russia: The consequences of the unified state exam reform," European Economic Review, Elsevier, vol. 117(C), pages 56-82.
    12. Joseph Han, 2022. "College Majors in Limited Supply: The Case of Private Universities in Korea," Korean Economic Review, Korean Economic Association, vol. 38, pages 381-414.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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