New version page

Rising Tuition and Supply Constraints

Upgrade to remove ads

This preview shows page 1-2-3-22-23-24-44-45-46 out of 46 pages.

Save
View Full Document
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 46 pages.
Access to all documents
Download any document
Ad free experience

Upgrade to remove ads
Unformatted text preview:

CENTER FOR LABOR ECONOMICS UNIVERSITY OF CALIFORNIA, BERKELEY WORKING PAPER NO. 66 Rising Tuition and Supply Constraints: Explaining Canada-U.S. Differences in University Enrollment Rates ∗ Nicole M. Fortin University of British Columbia May 2004 Abstract This paper exploits differences across the Canadian provinces and U.S. states in the evolution of cohort size, tuition levels and provincial/state appropriations per-college-age person from 1973 to 1999, to investigate cross-country differences in university/4-year college public enrollment rates. For the entire period, the elasticity of enrollment rates with respect to tuition levels is found to be the same in both countries at about -0.15. Provincial/state appropriations per-college-age person are also found to have played a determining role, especially in the 1970s when real tuition plummeted and in the 1990s when these sources of funding flattered. JEL Codes: I21, I22, H52, H73. Keywords: higher education, tuition fees, enrollment rates, interjurisditional differentials. ∗ This paper was prepared the John Deustch Conference Volume “Higher Education in Canada", while I was visiting the Center for Labor Economics at UC-Berkeley. I would like to thank Charles Beach, David Card and Thomas Lemieux for comments on this manuscript. I am indebted to Miles Corak for graciously sharing his data on provincial tuition rates and to Herb O’Heron for graciously providing data on provincial enrollments. Financial support was provided by SSHRC Grants INE #512-2002-1005.1. IntroductionTalks of a New Economy and population aging have fueled concerns about impeding short-ages of high skilled workers. While the 1980s have seen dramatic increases in enrollmentrates at higher education institutions in both Canada and the United States, in the 1990senrollment rates leveled off in Canada. Total enrollment at Canadian universities increasedat an annual rate of 4.1 percent between 1973 and 1990, but registered almost no growthin the 1990s.1In the United States, total enrollment at all universities and 4-year colleges(private and public) increased at an annual rate of 1.8 percent between 1973 and 1990, andcontinued to increase at an annual 0.8 percent rate during the 1990s.2The annual rate ofincrease of 1.7 percent at U.S. 4-year public institutions was initially similar, but in the1990s, the annual rate of increase of 0.2 percent was comparable to Canada’s rate.3The past twenty-Þve years have also seen spectacular increases in tuition levels atinstitutions of higher education in both countries. In 1973, the average real Canadiantuition (in 1999 $CAN) was around $2,300, in 1999 it had climb ed to $3,100.4In the UnitedStates, over the same period, average real tuition (in 1999 $US) at public institutions wentfrom $2,100 to $3,700.5Can these signiÞcant rises in tuition levels be implicated in theslow-down of enrollment rates? Or alternatively, can this slow-down be traced back to thedramatic changes in cohort size and direct government funding over that period? Thispaper addresses this puzzle by evaluating the impact of demographic changes and highereducation policies on enrollment rates. The analysis is set at the provincial/state levelwhere policy makers determine the lev el of higher education funding, as well as tuition and1According to Statistics Canada numbers obtained from the Association of Universities andColleges of Canada (A UCC), total enrollment w ent from 495,000 in 1973 to 841,000 in 1990, butÞnished off at 843,000 in 1999. Total enrollment is the simple sum of full-time and part-time Fallenrollment.2Total Fall enrollment at all 4-year institutions of higher education went from 6,590,000 in1973 to 8,580,000 in 1990, and ended up at 9,200,000 in 1999. These numbers are extracted fromtable 197 of National Center for Education Statistics (2003).3Total enrollment at 4-year public institutions of higher education w ent from 4,530,000 in 1973to 5,850,000 in 1990, and totaled 5,970,000 in 1999.4These Þgures from Corak, Lipps and Zhao (2003) are for Arts program.5Average t uition levels are derived using data from Raudenbush (2002). See the appendix fordetails.1capacity levels at public universities and colleges.In Canada, constitutional responsibility with education rests with the provinces andprovincial funding is the main source of general operating support for post secondaryinstitutions. In 1973, provincial funding constituted 72 percent of educational expendituresof universities; in 1999itwasdownto57percent.6The provinces rely on federal transfersto provide that funding and the steep decline in provincial support in the 1990s can be,in part, traced back to the federal deÞcit Þghting over that period (Cameron (2004)). Asshown below, there are nevertheless substantial differences across provinces in the growthof prov incial funding per-college-age person. Direct federal incursions into this area ofprovincial jurisdiction take the form of research grants and student aid. Excluding studentaid, direct federal funding has been the subject of substantially less ßuctuations over time.These federal expenditures amounted to 15 percent of educational expenditures in 1973and 12 percent in 1 999, noting that the impact of more recent federal initiatives such asthe Canada Foundation for Innovation and the Canada Research Chairs mostly fall afterthe period of study (see Snowdon (2004)).7In the United States, states and local governments have also historically invested heavilyin university/college education through direct and indirect subsidies, but that support hasbeen eroded with eac h recession, especially with the recession of the early 1990s. Thestate appropriations constituted about 59 percent of general education revenues of publichigher education institutions in 1973; by 1999 however, state appropriations were downto roughly 46 percent.8The share of federal appropriations, grants and contracts in thegeneral education rev enues of post-secondary public institutions is also sizeable, but like in6To enhance comparability with U.S. data, educational expenditures of universities are com-puted as total expenditures [CANSIM II series V1992346] minus capital expenditures [seriesV1992357]. See the data appendix and appendix table A1.7See appendix table A1.8These numbers are for all public institutions of higher education, including 2-year colleges butexcluding vocational and trade colleges. Note ho wever that the


Download Rising Tuition and Supply Constraints
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Rising Tuition and Supply Constraints and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Rising Tuition and Supply Constraints 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?