Essays on the market for higher education
Fabina, Jacob Stephen
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The U.S. higher education market grew substantially between 2005 and 2015, with an increase in the number of programs offered of 13% and an increase in annual graduations of nearly 30%. Can government policy significantly impact student and college decisions? Does this market respond to occupation-specific growth? Are for-profit colleges more responsive to changes in demand? I shed light on these questions in this dissertation. In Chapter 1, I estimate the impact of federal oversight on enrollment and completions at for-profit colleges. For-profit colleges experienced a 33% enrollment decline between 2010 and 2015 following an increase in federal oversight. Did oversight cause this decline? I assess the causal effect of two policies on for-profit enrollment: a significant report on misleading for-profit recruiting, and threatened federal student aid sanctions on under-performing colleges. I use a difference-in-difference framework that exploits the differential exposure of a treatment group to each policy. For the report, treatment is based on the presence of a local alternative; for sanctions, it is based on a debt-to-income threshold. Both policies significantly contributed to the enrollment decline: The report caused a 45% enrollment decline over 5 years at for-profit colleges with a nearby alternative, while the threat of sanctions led to a 121% greater enrollment decline at for-profit colleges below the performance threshold. In Chapter 2, I estimate the causal response of graduations and programs offered to new licensing requirements. Using a difference-in-difference framework, I exploit state-level variation in new licensing statutes. I find that new licenses cause increases in both the number of graduations and programs offered in fields related to the licensed occupations. I further show that new licenses cause employment increases in college-level occupations and employment declines in low-education occupations. In Chapter 3, I estimate program entry and exit due to labor demand shocks across college sectors. I find that the number of public and private non-profit Bachelor's degree programs offered increases following an employment increase in related occupations. However, I find no evidence of a similar response in the for-profit sector.