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Title: Optimal Timing of College Subsidies: Enrollment, Graduation, and the Skill Premium

Citation Type: Miscellaneous

Publication Year: 2019

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Abstract: In the United States, half of college enrollees drop out before earning a bachelor’s degree. This paper examines the effect of a college subsidy scheme, in which the subsidy amount varies across years in college, on college dropout and wage inequality. I find that by increasing college subsidies from freshmen to seniors, the number of college graduates increases. In addition, the skill premium decreases more than the case in which the total budget for current constant subsidies is increased by 50%. The scheme is welfare improving, despite the fact that enrollment decreases.

Url: http://www.cirje.e.u-tokyo.ac.jp/research/workshops/macro/macropaper19/macro1003.pdf

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Authors: Matsuda, Kazushige

Publisher: Hitotsubashi University

Data Collections: IPUMS CPS

Topics: Education

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