Via Instapundit. A new report shows that tuition increases are in some cases directly related to the increases of Pell Grants.

E. Frank Stephenson of Division of Labour has the story.

Pell Grants and College Tuition

Looks like colleges grab the subsidies by jacking up prices; this won’t stop folks from bleating about the need to increase Pells to make college more affordable. The abstract of a new paper:

The Pell grant program is the largest federal program for college students, with support to over three million students at more than six thousand institutions. A prominent question in public debate is whether Pell grants tend to be appropriated by universities through increases in tuition – consistent with what is known as the Bennett hypothesis. Based on a panel of 1554 colleges and universities from 1989 to 1996, we find little evidence of the Bennett hypothesis for in-state tuition for public universities. For private universities, though, increases in Pell grants appear to be matched nearly one for one by increases in list (and net) tuition. Results for out-of- state tuition for public universities are similar to those for private universities, suggesting that they behave more like private ones in setting out-of-state tuition. Institutional responses in these latter cases appear at odds with federal grants-in-aid policy.

One of the authors of the Pell Grant paper also has a paper examining the employment effects of recent minimum wage hikes in Washington and Oregon. I’ve put the abstract to that paper below the fold.

Recent studies yield mixed evidence regarding the employment effects of the minimum wage. This paper exploits a unique natural experiment initiated by two voter referendums that raised the minimum wage over three successive years and at different times in Oregon and Washington. Employment and employment growth specifications using BLS data indicate that the minimum wage generates consistently negative employment effects for eating and drinking workers where the minimum is shown to be relatively binding, but not for hotel and lodging workers where the minimum is less binding. Regressions using job-specific, want-ad data from Portland and Seattle newspapers also indicate a reduction in search relating to the extent that the minimum wage binds. Overall, the results suggest the minimum wage to be a blunt instrument that differentially affects lowwage workers within and across industries.

Source here.