The Competitive Effects of Online Education

David J. Deming, Michael Lovenheim, Richard W. Patterson

NBER Working Paper No. 22749
Issued in October 2016
NBER Program(s):Economics of Education

We study the impact of online degree programs on the market for U.S. higher education. Online degree programs increase the competitiveness of local education markets by providing additional options in areas that previously only had a small number of brick-and-mortar schools. We show that local postsecondary institutions in less competitive markets experienced relative enrollment declines following a regulatory change in 2006 that increased the market entry and enrollment of online institutions. Impacts on enrollment were concentrated among private non-selective institutions, which are likely to be the closest competitors to online degree programs. We also find increases in per-student instructional spending among public institutions. Our results suggest that by increasing competitive pressure on local schools, online education can be an important driver of innovation and productivity in U.S. higher education.

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Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22749

Forthcoming: The Competitive Effects of Online Education, David J. Deming, Michael Lovenheim, Richard Patterson. in Productivity in Higher Education, Hoxby and Stange. 2018

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