College on the Cheap: Consequences of Community College Tuition Reductions

Abstract

This paper examines the effects of community college tuition on college enrollment. I exploit quasi-experimental variation from discounts for community college tuition in Texas that were expanded over time and across geography for identification. Community college enrollment in the first year after high school increased by 5.1 percentage points for each $1,000 decrease in tuition, which implies an elasticity of —0.29. Lower tuition also increased transfer from community colleges to universities. Marginal community college enrollees induced to attend by reduced tuition have similar graduation rates as average community college enrollees. (JEL H75, I22, I23, I28)