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Building the Stock of College-Educated Labor
- Journal of Human Resources
- University of Wisconsin Press
- Volume 43, Number 3, Summer 2008
- pp. 576-610
- 10.1353/jhr.2008.0020
- Article
- Additional Information
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Half of college students drop out without completing a degree. This paper establishes a causal link between college costs and degree completion. I use quasi-experimental methodology to analyze two state scholarship programs. The programs increase the share of the exposed population with a college degree by three percentage points, with stronger effects among women. A cost-benefit analysis indicates that the programs are socially efficient at rates of return to schooling as low as 5 percent. Even with the offer of free tuition, many students continue to drop out, suggesting tuition costs are not the only impediment to college completion.