The Labor Market Effects of Eliminating University Tuition in Ecuador

Teresa Molina and Ivan Rivadeneyra ()
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Ivan Rivadeneyra: University of Hawaii at MÄ noa

No 201901, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: It is both theoretically and empirically unclear whether a drastic nationwide reduction in the cost of education should significantly improve individual labor market outcomes. This paper estimates the labor market effects of a 2008 policy that eliminated tuition fees at public universities in Ecuador. We use a difference-in-difference strategy that exploits variation across cohorts differentially exposed to the policy, as well as geographic variation in access to public universities. We find that the tuition fee elimination significantly increased college participation, but did not improve income. The policy had modest effects on job type, shifting people out of more physical jobs. However, the bulk of the benefits of this fee elimination were enjoyed by individuals of higher socioeconomic status.

Keywords: higher education; tuition reduction; Ecuador (search for similar items in EconPapers)
JEL-codes: I23 I24 I28 O15 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-dev and nep-lab
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