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

24 Pages Posted: 28 Feb 2012

See all articles by Viktor Steiner

Viktor Steiner

Free University of Berlin (FUB)

Katharina Wrohlich

DIW Berlin, German Institute for Economic Research

Date Written: March 2012

Abstract

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.

Keywords: Financial incentives, demand for higher education

JEL Classification: H52, H24, I28

Suggested Citation

Steiner, Viktor and Wrohlich, Katharina, Financial Student Aid and Enrollment in Higher Education: New Evidence from Germany (March 2012). The Scandinavian Journal of Economics, Vol. 114, Issue 1, pp. 124-147, 2012. Available at SSRN: https://ssrn.com/abstract=2012217 or http://dx.doi.org/10.1111/j.1467-9442.2011.01669.x

Viktor Steiner

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

Katharina Wrohlich

DIW Berlin, German Institute for Economic Research ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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