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

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Author Info
Viktor Steiner
Katharina Wrohlich

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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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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 805.

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Length: 29 p.
Date of creation: 2008
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Handle: RePEc:diw:diwwpp:dp805

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Related research
Keywords: Higher Education Financial Incentives Competing Risk Model

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Find related papers by JEL classification:
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
I28 - Health, Education, and Welfare - - Education - - - Government Policy

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2006. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 126-145, May. [Downloadable!] (restricted)
  2. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) : Scope, Evolution and Enhancements," SOEPpapers 1, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  3. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Fredriksson, Peter, 1997. " Economic Incentives and the Demand for Higher Education," Scandinavian Journal of Economics, Blackwell Publishing, vol. 99(1), pages 129-42, March. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
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  1. Spiess, C. Katharina & Wrohlich, Katharina, 2008. "Does Distance Determine Who Attends a University in Germany?," IZA Discussion Papers 3615, Institute for the Study of Labor (IZA). [Downloadable!]
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