Market Structure and College Access in the US

Emily E. Cook and Emily Cook

No 11733, CESifo Working Paper Series from CESifo

Abstract: State governments provide grants to students to subsidize college attendance. In response, colleges can adjust their tuition, aid policies, and admission standards, affecting equilibrium enrollment and pass-through of aid to students. To quantify demand- and supply-side responses, I develop a model that incorporates the geographic nature of the market and strategic competition between individual colleges. Simulations demonstrate that college responses are meaningful: when students receive $1,000 to attend in-state public colleges, these colleges absorb over 40% of the subsidy on average and raise admissions standards, reducing the enrollment effect of the policy. Close competitors see enrollment declines of 2-3%.

Keywords: college choice; college admission; college enrollment; financial aid; mixed oligopoly; non-profit firms; demand estimation (search for similar items in EconPapers)
JEL-codes: I23 I28 L13 L31 (search for similar items in EconPapers)
Date: 2025
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