How do Promise programs benefit communities?

Migration.
Because many Promise programs have residence-based eligibility, economic theory suggests that some people may be enticed to move into an area (or decide against leaving that area) to gain (or keep) access to the scholarship benefits. Unsurprisingly, these forces should be greater for families with school-age children. Two relatively early studies focused on the migration impacts of the Kalamazoo Promise. The first found that new student enrollment in the Kalamazoo Public Schools District surged in the year after the Kalamazoo Promise was announced but that gains in enrollment in subsequent years were increasingly driven by greater retention; that is, fewer students were leaving than before.⁴ A second study, which looked at the nuances of where students were coming from, found that while approximately 60% of new students came from a neighboring district, one-quarter came from out of state; moreover, exit rates persistently fell by one-third.⁵ This implies that migration and housing were likely more affected than labor markets, as many families may have changed residential locations within the metro area without having to switch jobs.

A pair of subsequent studies expanded the scope of this research by examining the impacts on migration across multiple (relatively generous) Promise programs: one study focused on eight programs while the second analyzed three. Rather than looking only at migration among enrolled students, both these analyses focused on all residents of the broader community. For the first study, the findings indicated sharp reductions in outmigration over at least the three years after program announcement, although changes in in-migration were less conclusive. The declines in out-migration were larger for households with children, as expected, and concentrated around Promise-eligible zones. Quantitatively, these migration changes imply the metro area’s population, three years after the program began, was 1.7% larger than it would have been without the program, predominantly because more families stayed. For an area of 100,000 people, this amounts to an additional 1,700 individuals, which is a sizable effect. The second study had roughly similar findings, although with the additional nuance that migration impacts—especially retention—were more concentrated among higher-income residents.

Housing.
These migration impacts—which, again, are estimated from atypically generous programs and thus will not generalize to all Promise programs—suggest that housing markets could also be affected. Moreover, even families whose migration decisions are unaffected could still affect local housing: a family that expects to save several tens of thousands of dollars in lower tuition for their children may decide, for example, to move to a bigger house or nicer neighborhood within the Promise-eligible zone. More generally, houses within the zone should become more valuable because they come with the scholarship amenity, and this could be reflected in prices, in construction of new housing, or both. These channels would be expected to increase an area’s property tax revenue, allowing for greater provision of public services (or tax cuts). However, greater price appreciation, rather than new construction, could also make housing less affordable for many families.

One study of the Say Yes to Education programs in both Syracuse and Buffalo found suggestive evidence that, after the program took effect, house prices in the Syracuse eligibility zone increased relative to those in neighborhoods just outside the zone. Buffalo, however, saw little relative price change, although changes in the quantity of housing weren’t analyzed.⁷ A separate, broader study of eight Promise programs—still disproportionately generous ones—found that, within three years of program announcement, housing prices rose 7%–12% in eligible areas relative to the immediately surrounding areas. These gains were concentrated in the top half of the housing price distribution and in neighborhoods that contained schools with higher standardized test scores.⁸ This pattern suggests that higher-income families anticipate greater value from the Promise scholarship, perhaps because their children are more likely to both go to college and go to more expensive institutions.⁹ Still, since the value of the scholarship is more likely to capitalize into housing prices for these families, their net benefits are reduced more than for lower-income families, making the ultimate distribution of benefits by socioeconomic status unclear. Much likely depends on peer effects—how student learning is affected by the presence of other students—as well as how communities choose to allocate the additional tax revenue: more services for lower-income students, general school funding increases, or lower tax rates.

Workforce Development.
As noted above, Promise programs can increase the educational attainment and career opportunities of students. Communities as a whole will benefit to the extent that these individuals either stay nearby or return to the local community after their education. This decision, in turn, is likely affected by the availability of local, high-quality job prospects.

Few studies have examined this potential effect, as the needed data are hard to come by. One study focused on Kalamazoo found that graduates, by the time they reached their mid-to-late 20s, were 11 percentage points more likely to reside within 10 miles of downtown Kalamazoo. These individuals were also more likely to be earning above $35,000 annually than earlier cohorts at the same age.¹⁰ A study on Knox Achieves found that the last-dollar program led to higher rates of associate’s degree attainment starting 4 years after high school, but no changes in earnings as late as 9 years after high school.¹¹ This mixed body of early evidence underscores the need for more research on workforce returns to Promise programs, and in particular the role of program design and aid generosity.