Effects of Tuition-Free College on High School Students. Evidence from a Chilean Reform

The discussion about the costs of college education, who has to pay for it, and its implications for social inequality and mobility, is of primary importance for educational stratification scholars and policy makers. While increasing evidence has accumulated on the impact of accessing secure funding in reducing socioeconomic enrollment and completion gaps in higher education, there is less evidence on how large-scale policy changes on college funding would affect students’ decisions earlier in their educational trajectories, in anticipation of benefiting from such policies in the future. Usually those decisions are unanticipated, or at least they are not accounted for in the policy design. In this study, I show how the introduction of tuition-free college in Chile (2016), a drastic departure form the country’s previous focus on partial scholarship and student loans, affected the educational trajectories of high school students. Using administrative data analyzed in an quasi-experimental, event-study framework, I provide evidence of the positive effect that increasing access to guaranteed funding for higher education had on secondary school students’ trajectories, significantly lowering dropout rates, especially among those in the most socially disadvantaged schools. In other words, I show how a policy itself can change the population at risk of benefiting from the policy in the future, complicating the evaluation of its distributional consequences. I discuss the relevance of these findings for social stratification scholars and policy researchers.