Unequal Opportunity: An Empirical Approach to the Potential Effects of Tuition-Free Community College Across the United States

Abstract

Tuition-free community college is a popular Democratic policy proposal, and it was included in President Biden’s original version of the American Families Plan. Economic theory and empirical research show that universal free community college would likely increase enrollment and improve graduation rates. Although the policy appears to be consistent across the country, existing heterogeneity in the total cost of community college means that the magnitude of the policy’s effect would vary widely. We calculate the percent reduction in total costs under the policy at 997 community colleges, and we apply Denning’s (2017) elasticity of demand for community college to predict the enrollment increase for first-time students. We estimate that first-time enrollment would increase by about 30%. We find that cost reductions are largest in the Northeast, Midwest, and Appalachia; in towns and rural areas; in states with fewer adults with Bachelor’s degrees; and in states with Republican governors. Based on the geographic variation, the proportion of white students would likely increase. We recommend a bipartisan framing of the policy as an economic and workforce development initiative that would especially benefit rural areas and Republican-leaning states.