Financial Student Aid and Enrollment in Higher Education: New Evidence from Germany
Free University of Berlin (FUB)
DIW Berlin, German Institute for Economic Research; Institute for the Study of Labor (IZA)
The Scandinavian Journal of Economics, Vol. 114, Issue 1, pp. 124-147, 2012
Means‐tested student aid might affect enrollment in higher education. To derive the potential influence of student aid, we use a tax‐benefit microsimulation model. The effect is a non‐linear function of parental income, with variation as a result of bracket creeping and various reforms. Therefore, the effect of student aid on enrollment can be separated from the effects of income and other family characteristics. Using the German Socio‐Economic Panel, we find a small but significant positive effect, similar in size to the effects reported in previous studies for European countries but smaller than in the US.
Number of Pages in PDF File: 24
Keywords: Financial incentives, demand for higher education
JEL Classification: H52, H24, I28Accepted Paper Series
Date posted: February 28, 2012
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