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IES Grant

Title: Causes and Consequences of Public Subsidies in Higher Education: Evidence from Community College Districts
Center: NCER Year: 2010
Principal Investigator: McFarlin Jr., Isaac Awardee: University of Michigan
Program: Postsecondary and Adult Education      [Program Details]
Award Period: 4 years Award Amount: $2,573,484
Type: Efficacy and Replication Award Number: R305A100369

Purpose: Governments spend a great deal of money on across-the-board subsidies to promote college access. Despite the expensive nature of this intervention, little is known about its impact on academic outcomes and labor market success. This project is the first comprehensive study of a state system of community college taxing districts (i.e., districts that have a property tax designed to help fund community college education) on individual economic and societal well-being. It is designed to answer questions about the effects of community college tuition subsidies on college access, educational attainment and labor market outcomes. Answers to these questions will include students at different levels of ability, with different tuition costs based on whether they reside within the college-district boundary or not, and those from different racial/ethnic and socioeconomic backgrounds.

Project Activities: Effects of community college tuition subsidies on college access and attainment will be analyzed using data from the Texas Schools Microdata Panel, the U.S. Decennial Census, and newly collected data for a subset of school districts whose catchment areas significantly overlap college taxing district boundaries. The Texas Schools Microdata Panel allows for tracking students from K-12 schools through college and into the labor market. Identification of a group of similar students who live outside of college-district boundaries, and who therefore pay higher tuition, provides a comparison condition.

Products: Products include published reports on the long-term effects of community college tuition subsidies on college access and success. Reports will also include results on how receiving education from community colleges may affect individual long-run labor market performance.

Structured Abstract

Setting: The study will take place using data from 67 public community colleges within 50 college taxing districts throughout the state of Texas.

Population: Participants include over 2 million students who graduated from Texas high schools between 1991 and 2002.

Intervention: This project will examine the availability of tuition subsidies for local community colleges in relation to community college taxing district residency requirements. A comparison condition will be constructed by identifying non-residents who live on opposite, adjacent sides of college-district boundaries and therefore face greater community college costs.

Research Design and Methods: This project uses a "natural experiment" using the sharp spatial variation in tuition costs associated with community college taxing district residency to isolate the impact of subsidies on student outcomes. The study will use instrumental variables and regression discontinuity methods to examine how tuition subsidies for community colleges influence student outcomes. Researchers will conduct extensive analyses to determine whether there are biases resulting from individuals sorting into regions based on preferences for community colleges. Also, because community colleges are sometimes perceived as maintaining lower "college quality," the potential for perverse effects of lowering overall education attainment is investigated. Given the large sample and existing evidence showing that college-district residency exerts meaningful, precisely-estimated impacts on academic outcomes in college, college-district residency will be used as an instrumental variable to isolate the effect of attending community college on labor market success.

Researchers will also use two other research designs to examine the effect of college taxing district subsidies. The second research design uses a subsample of school districts where exact residential location and school catchment areas include areas inside and outside of taxing districts. This will enable a regression discontinuity analysis that compares students on either side of the taxing district boundary. Researchers will also exploit changes in taxing district boundaries over time to identify the effects of receiving subsidized tuition.

The project also includes collection of detailed geographic measures of taxing district boundaries, information on tuition rates, and exact residential location for a subsample of districts.

Control Condition: There is no control condition.

Key Measures: Outcomes include enrollment in a two-year and/or four-year college, retention, accumulated credits, receipt of academic and vocational degrees, and earnings after leaving school.

Data Analytic Strategy: Standard parametric and non-parametric methods will be used in the regression discontinuity analyses. Two stage least squares with instrumental variables will be used to conduct the data analysis.