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Tax Preferences for Higher Education and Adult College Enrollment

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Abstract

The federal government delivers substantial college aid through the tax code, after introducing education tax credits in 1998 and a tuition deduction in 2002. The design of the Lifetime Learning tax credit and the tuition deduction may make them particularly useful to older students. This paper investigates how these provisions have affected college attendance of individuals in their 30s and 40s. For most adults, there is no effect on college attendance. Among men whose 1998 educational attainment falls short of earlylife educational expectations, eligibility for an education tax preference is associated with a 2.5 to 3.4 percentage point increase in the probability of college attendance.

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File URL: http://web.williams.edu/Economics/wp/LaLumiaEducationTaxCredits.pdf
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Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2010-11.

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Length: 41 pages
Date of creation: Sep 2010
Date of revision:
Publication status: Forthcoming in the National Tax Journal
Handle: RePEc:wil:wileco:2010-11

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Keywords: college finance; education tax credits; and college enrollment;

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References

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  1. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
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  4. Dynarski, Susan, 2005. "Building the Stock of College-Educated Labor," Working Paper Series rwp05-050, Harvard University, John F. Kennedy School of Government.
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  7. Jepsen, Christopher & Montgomery, Mark, 2009. "Miles to go before I learn: The effect of travel distance on the mature person's choice of a community college," Journal of Urban Economics, Elsevier, vol. 65(1), pages 64-73, January.
  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.
  9. John Bound & Michael F. Lovenheim & Sarah Turner, 2010. "Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 129-57, July.
  10. Robert Carroll & Douglas Holtz-Eakin & Mark Rider & Harvey Rosen, 1996. "Income Taxes and Entrepreneur' Use of Labor," Working Papers 752, Princeton University, Department of Economics, Industrial Relations Section..
  11. Louis Jacobson & Robert J. LaLonde & Daniel Sullivan, 2005. "The impact of community college retraining on older displaced workers: Should we teach old dogs new tricks?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(3), pages 398-415, April.
  12. Neil S. Seftor & NSarah E. Turner, 2002. "Back to School: Federal Student Aid Policy and Adult College Enrollment," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 336-352.
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Cited by:
  1. Turner, Nick, 2010. "Why Don’t Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertial in Program Selection," University of California at San Diego, Economics Working Paper Series qt0pb3f440, Department of Economics, UC San Diego.

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