Date of Award

8-10-2021

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. Daniel Kreisman

Abstract

This dissertation consists of two chapters that study a free tuition policy in Chile. This is a politically charged issue on which there is still little evidence, which makes it a difficult but especially important policy to study. In 2016, Chile waived tuition for the poorest 50\% of the population. In the first year of implementation, this policy covered mostly academic programs. In the second year, it was extended to technical education. This stepwise implementation offers an interesting perspective for studying the self-selection of vulnerable students in technical or professional careers.

In the first chapter, I exploit the arbitrary cut that this policy uses to estimate the effect of free tuition on the type of program low-income students choose. Using a Regression Discontinuity Design and a Difference-in-Difference approach, I show that the policy increased college enrollment for eligible students by around seven percentage points in total. This increase was driven mainly by high ability, low-income students, who enrolled in larger numbers and did so in higher quality institutions. Results suggest that despite a generous loan program in Chile, the removal of tuition for low-income students led to meaningful changes in college accessibility.

In the second chapter, I present the potential effect of this policy on the mismatching of vulnerable students. Through a detailed descriptive analysis, I show that access to higher education in Chile, especially to selective programs, is closely related to student income. The differential in student performance cannot fully explain this gap, suggesting that there are spaces to democratize access to higher education further.

As a whole, this thesis shows that low-income, high-performance students face economic constraints that prevent them from entering selective and high-return programs. This problem exists even in the absence of restrictions on access to credit, as shown in this case.

DOI

https://doi.org/10.57709/24062469

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