This course covers issues in higher education from an economic and public policy perspective. We begin by examining the individuals decision to attend college and the main reasons for government intervention in higher education. We then review estimates of both private and social returns to college and consider the difficulties associated with measuring these returns. We also examine the history of the American system of higher education and compare it to other systems around the world. After summarizing the differences in educational attainment by income, the course will analyze the main forms of financial aid currently used in the American system of higher education: means-tested grants (Pell Grant program), subsidized loans (Stafford loans), direct subsidies to public institutions, recent tax reforms to encourage saving for college (Hope and Life-Long Learning credits), as well as state and institutional merit aid. We will discuss whether these policies make sense from both an economic and an educational perspective, and look at their effect on enrollment. After summarizing differences in educational attainment by race, we will consider affirmative action policy past and present. Finally, we will examine the market for college education and the increasing price of college in recent years. Other topics may include the importance of peer effects, graduate and professional education, and for-profit higher education. Prerequisites: PP32300 and PP31000 or equivalent coursework in statistics and economic theory.
