Abstract: We study how colleges' ``sticker price'' and institutional financial aid change during and after tuition caps and freezes using a modified event study design. While tuition regulations lower sticker prices, colleges recoup losses by lowering financial aid or rapidly increasing tuition after regulations end. At four-year colleges, regulations lower sticker price by 6.3 percentage points while simultaneously reducing aid by nearly twice as much (11.3 percentage points). At two-year colleges, while regulations lower tuition by 9.3 percentage points, the effect disappears within three years of the end of the regulation. Changes in net tuition vary widely; focusing on four-year colleges, while some students receive discounts up to 5.9 percentage points, others pay 3.8 percentage points more than they would have without these regulations. Students who receive financial aid, enter college right after the regulation is lifted, or attend colleges that are more dependent on tuition benefit less.
Abstract: This article reviews the basic patterns of employment and school enrollment for new labor market entrants in the period leading up to the Great Recession and in the decade thereafter. We find a persistent shift into four-year colleges that began during the Great Recession. At the same time, fewer youth are neither working nor enrolled in school. We see little change in occupational training programs during our study period, in program or in participation rates; in particular, rates of training provided via federal workforce development programs remain low among workforce entrants. The research literature on these programs has advanced but without large effects on policy or practice.
Abstract: This paper contributes to the literature on the causal effect of college quality on student labor market outcomes by exploring mechanisms behind earnings impacts, with a focus on choice of major and occupation. Using data from the NLSY97 and a “selection on observed variables” identification strategy with a rich set of covariates, I find that students who attend high-quality colleges sort into higher-paying occupations. These large and statistically significant effects of college quality on predicted earnings of occupation can account for over half of the earnings return to college quality. On the contrary, predicted earnings by major are not found to be affected by college quality in any economically meaningful or statistically significant way. I apply the framework from Oster (2019) to probe my results for sensitivity, and find that they are robust to a variety of plausible assumptions about the nature of selection on unobserved variables.