Working Paper Revision
Expanding Access to Selective Colleges
Abstract: This paper studies the effects of expanding high-quality public university capacities. Using a quantitative model of college choice, we find that expanding the most selective colleges by 20 percent increases aggregate earnings by 0.8 percent and welfare by 2.2 percent. The gains arise because a large number of high-ability students are rationed out of selective colleges. When admitted, these students graduate at high rates and enjoy substantial earnings gains. These earnings gains are eight times larger than the fiscal cost of financing the expansion. Our findings remain robust when we account for peer effects in student learning.
https://doi.org/10.20955/wp.2026.005
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https://doi.org/10.20955/wp.2026.005
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2026-06-13
Number: 2026-005
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