TY  - JOUR
AU  - Dynarski,Susan
TI  - Building the Stock of College-Educated Labor
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11604
PY  - 2005
Y2  - September 2005
UR  - http://www.nber.org/papers/w11604
L1  - http://www.nber.org/papers/w11604.pdf
N1  - Author contact info:
Susan Dynarski
University of Michigan
Weill Hall
735 South State Street
Ann Arbor, MI 48109-3091
Tel: 734 615 5113
Fax: NA
E-Mail: dynarski@umich.edu
M2  - featured in NBER digest on 2005-09-19
AB  - Half of college students drop out before completing a degree. These low rates of college completion among young people should be viewed in the context of slow future growth in the educated labor force, as the well-educated baby boomers retire and new workers are drawn from populations with historically low education levels. This paper establishes a causal link between college costs and the share of workers with a college education.  I exploit the introduction of two large tuition subsidy programs, finding that they increase the share of the population that completes a college degree by three percentage points. The effects are strongest among women, with white women increasing degree receipt by 3.2 percentage points and the share of nonwhite women attempting or completing any years of college increasing by six and seven percentage points, respectively. A cost-benefit analysis indicates that tuition reduction can be a socially efficient method for increasing college completion. However, even with the offer of free tuition, a large share of students continue to drop out, suggesting that the direct costs of school are not the only impediment to college completion.
ER  -