The Effects of Widespread Online Education on Market Structure and Enrollment

Nano Barahona, Caue Dobbin and Sebastián Otero

No 34522, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the rapid expansion of Brazil's private online higher-education sector and its effects on market structure and college enrollment. Exploiting regional and field-specific variation in online education penetration, we find that online programs expand access for older students but divert younger students from higher-quality in-person programs. Greater competition lowers tuition prices but also reduces the supply of in-person degrees. Using an equilibrium model of college education, we show that in the absence of online programs, total enrollment would be 14 percent lower, while in-person enrollment would rise by 33 percent. On net, aggregate labor-market value added declines by 1.4 percent. Online education raises value added for older students, who benefit from increased access, but lowers it for younger students, who shift toward lower-return online options. Counterfactual policies that restrict online enrollment to older cohorts could increase value added for younger students without reducing gains for older cohorts.

JEL-codes: I23 I24 I26 J24 L11 L13 (search for similar items in EconPapers)
Date: 2025-11
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