Crowded Out? The Effect of Nonresident Enrollment on Resident Access to Public Research Universities

Abstract

Public universities have pursued nonresident enrollment growth as a solution to the stagnation of state funding. Representatives of public universities often argue that nonresident tuition revenue is an important resource in efforts to finance access for resident students, whereas state policymakers are concerned that nonresident enrollment reduces opportunities for residents. This study investigated whether nonresident enrollment growth crowded out resident enrollment at public research universities using an instrumental variable identification strategy. For the sample of all public research universities, increased nonresident enrollment did not affect resident enrollment. For prestigious public research universities, nonresident enrollment growth had a negative effect on resident enrollment. The findings suggest that nonresident enrollment growth does not benefit resident access, as suggested by university administrators, nor does it harm resident access, as suggested by state policymakers. However, state policymakers may be concerned that nonresident enrollment crowds out resident access at prestigious public universities.