Expanding College Access

Lutz Hendricks, Tatyana Koreshkova and Oksana Leukhina

No 2026-005, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper studies the effects of expanding high-quality public university capacities on student earnings and welfare. Using a quantitative model of college choice, we find that expanding the most selective colleges by 20 percent increases aggregate earnings by 0.8 percent and welfare by 2 percent. The gains arise because a large number of high-ability students are rationed out of selective colleges. When admitted, these students graduate at high rates and enjoy substantial earnings gains. The earnings gains generated by expanding college capacity are eight times larger than the fiscal cost of financing it. These findings remain robust when we account for peer effects in learning and general equilibrium changes in the college wage premium.

Keywords: college quality; human capital; public finance of higher education (search for similar items in EconPapers)
JEL-codes: J24 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2026-03-26
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.20955/wp.2026.005 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:102965

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2026.005

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().