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Expansion or Diversion? New Universities and Enrollment Choices in California

November 16, 201612:00 pm1:30 pm

Do non-tuition costs constrain college access? From 1995 to 2005, four new public universities in California began admitting first-year students. I exploit these new campus openings to test if relaxing distance cost constraints will increase four-year college enrollment among local high school graduates. I show that distance is still influential in the first-time enrollment of recent high school graduates; the majority of enrollees in public four-year colleges stay within 50 miles of home, with approximately 40 percent enrolled only 25 miles away from their high school of origin. Using event study and difference-in-difference models, I find that new university openings increase four-year enrollment among recent high school graduates from treated schools within 0 to 25 miles of the new campus; the estimated share of high school graduates enrolling in any public four-year college rises by 1.6 percentage points, an increase of over 8 percent in the mean four-year college attendance share. Three-quarters of this increase is driven by local students attending the new universities; enrollment to existing campuses from local high schools is unaffected. Students from treated schools without an existing public university within 25 miles are more likely to attend the new university when it opens, but there are no other significant differences in enrollment outcomes to new campuses between richer and poorer schools, nor between under-represented minority (URM) and White/Asian students at the same schools. My findings support the view that cost-of-living constraints are binding for many prospective college students.