A concern with this framework is that selection into the treatment group (i.e., attendance at a public 4-year university before age 23) is a choice on the part of the individual. It would seem quite plausible that the attendance choices of prospective students depend on the tuition they face, and such endogenous selection would bias our estimates. We show, however, that an individual’s probability of attending a public 4-year university is essentially uncorrelated with the average tuition charged, at least for the relatively small increases in tuition used in this study to identify the effect of interest. In section IV.E, we discuss the issue of endogenous selection in detail and place our findings in the context of the relevant literature. Continue reading “These studies suggest that credit constraints after postsecondary education may also be relevant outside the mortgage market”