The Economic Effects of Free Elite Education: Evidence from a Flagship University in Brazil

This paper examines the labor market returns to attending free elite higher education for different socioeconomic and demographic groups in Brazil. Using restricted-access data from a flagship public university and income information from the tax registry of firms, we explore an entrance rule that generates exogenous variation close to admission cutoffs, allowing us to compare successful and non-successful applicants and to estimate the causal effect of enrollments on future salaries. The benefits are more pronounced among students from low income families and whose parents have lower education levels. Moreover, the low income students who enrolled at the elite university have higher chances of acquiring a college degree in the future. We also find higher earnings premiums from attending the high quality institution for women than for men. Our results contribute to the overall debate about the role of public universities in providing opportunities for social mobility for traditionally marginalized demographic groups.