The Out-of-State Tuition Distortion
AbstractPublic universities typically charge much higher tuition to nonresidents. We first investigate the welfare implications of this tuition gap in a simple model. While the social planner does not distinguish between residents and nonresidents, state governments set higher tuition for nonresidents. The welfare gains from reducing the tuition gap can be characterized by a sufficient statistic relating out-of-state enrollment to the tuition gap. We estimate this sufficient statistic via a border discontinuity design using data on the geographic distribution of students by institution.
CitationKnight, Brian, and Nathan Schiff. 2019. "The Out-of-State Tuition Distortion." American Economic Journal: Economic Policy, 11 (1): 317-50. DOI: 10.1257/pol.20170499
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I22 Educational Finance; Financial Aid
- I23 Higher Education; Research Institutions