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

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  • Viktor Steiner
  • Katharina Wrohlich

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.

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File URL: http://hdl.handle.net/10.1111/j.1467-9442.2011.01669.x
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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 114 (2012)
Issue (Month): 1 (03)
Pages: 124-147

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Handle: RePEc:bla:scandj:v:114:y:2012:i:1:p:124-147

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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References

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  1. Helena Skyt Nielsen & Torben S�rensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 185-215, May.
  2. Lauer, Charlotte, 2003. "Family background, cohort and education: A French-German comparison based on a multivariate ordered probit model of educational attainment," Labour Economics, Elsevier, vol. 10(2), pages 231-251, April.
  3. Dynarski, Susan, 2001. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," Working Paper Series rwp01-034, Harvard University, John F. Kennedy School of Government.
  4. David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2002. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," NBER Working Papers 9228, National Bureau of Economic Research, Inc.
  5. Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
  6. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  7. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 629-62, September.
  8. Katharine G. Abraham & Melissa A. Clark, 2003. "Financial Aid and Students' College Decisions: Evidence from the District of Columbia's Tuition Assistance Grant Program," Mathematica Policy Research Reports 3675, Mathematica Policy Research.
  9. Susan Dynarski, 2002. "The Behavioral and Distributional Implications of Aid for College," American Economic Review, American Economic Association, vol. 92(2), pages 279-285, May.
  10. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
  11. Fredriksson, Peter, 1997. " Economic Incentives and the Demand for Higher Education," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 129-42, March.
  12. Susan Dynarski, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," NBER Working Papers 7756, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Glocker, Daniela & Steiner, Viktor, 2011. "Returns to Education across Europe," CEPR Discussion Papers 8568, C.E.P.R. Discussion Papers.
  2. Glocker, Daniela & Steiner, Viktor, 2011. "Returns to education across Europe: A comparative analysis for selected EU countries," Discussion Papers 2011/15, Free University Berlin, School of Business & Economics.
  3. Frank M. Fossen & Daniela Glocker, 2009. "Expected Future Earnings, Taxation, and University Enrollment: A Microeconometric Model with Uncertainty," Discussion Papers of DIW Berlin 934, DIW Berlin, German Institute for Economic Research.
  4. Benedikt Siegler, 2012. "The Effect of University Openings on Local Human Capital Formation: Difference-in-Differences Evidence from Germany," Working Papers 124, Bavarian Graduate Program in Economics (BGPE).
  5. C. Katharina Spieß & Katharina Wrohlich, 2008. "Does Distance Determine Who Attends a University in Germany?," SOEPpapers on Multidisciplinary Panel Data Research 118, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Regina Riphahn & Florian Schieferdecker, 2008. "The Transition to Tertiary Education and Parental Background over Time," Working Papers 063, Bavarian Graduate Program in Economics (BGPE).
  7. Loris Vergolini & Nadir Zanini, 2012. "How does aid matter? The effect of financial aid on university enrolment decisions," Working Papers 2012/7, Institut d'Economia de Barcelona (IEB).
  8. Hübner, Malte, 2012. "Do tuition fees affect enrollment behavior? Evidence from a ‘natural experiment’ in Germany," Economics of Education Review, Elsevier, vol. 31(6), pages 949-960.
  9. Frank Fossen & Daniela Glocker, 2011. "Expected future earnings, taxation, and university enrollment," International Tax and Public Finance, Springer, vol. 18(6), pages 688-723, December.

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