Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/241105
Year of Publication: 
2020
Series/Report no.: 
Staff Report No. 912
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
This paper investigates the effects of college tuition on student debt and human capital accumulation. We exploit data from a random sample of undergraduate students in the United States and implement a research design that instruments for tuition with relatively large changes to the tuition of students who enrolled at the same school in different cohorts. We find that $10,000 in higher tuition causally reduces the probability of graduating with a graduate degree by 6.2 percentage points and increases student debt by $2,961. Higher tuition also reduces the probability of obtaining an undergraduate degree among poorer, credit-constrained students. Thus, the relatively large increases in the price of education in the United States in the past decade can affect the accumulation of human capital.
Subjects: 
tuition
student debt
human capital
credit constraints
JEL: 
D14
H52
H81
I23
J24
Document Type: 
Working Paper

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