Financial Student Aid and Enrollment into Higher Education: New Evidence from Germany

29 Pages Posted: 25 Jun 2009

See all articles by Viktor Steiner

Viktor Steiner

German Institute for Economic Research (DIW Berlin)

Katharina Wrohlich

DIW Berlin, German Institute for Economic Research

Date Written: July 1, 2008

Abstract

We estimate the elasticity of enrollment into higher education with respect to the amount of means tested student aid (BAfoeG) provided by the federal government using the German Socioeconomic Panel (SOEP). Potential student aid is derived on the basis of a detailed taxbenefit microsimulation model. Since potential student aid is a highly non-linear and discontinuous function of parental income, the effect of BAfoeG on students' enrollment decisions can be identified separately from parental income and other family background variables. We find a small but significant positive elasticity similar in size to those reported in previous studies for the United States and other countries.

Keywords: higher education, financial incentives, competing risk model

JEL Classification: H52, H24, I28

Suggested Citation

Steiner, Viktor and Wrohlich, Katharina, Financial Student Aid and Enrollment into Higher Education: New Evidence from Germany (July 1, 2008). DIW Berlin Discussion Paper No. 805. Available at SSRN: https://ssrn.com/abstract=1424922 or http://dx.doi.org/10.2139/ssrn.1424922

Viktor Steiner (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Katharina Wrohlich

DIW Berlin, German Institute for Economic Research ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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