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Enrolment into Higher Education and Changes in Repayment Obligations of Student Aid – Microeconometric Evidence for Germany

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Author Info
Hans J. Baumgartner (DIW Berlin)
Viktor Steiner (DIW Berlin)

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Abstract

We evaluate the effect of the federal students’ financial assistance scheme (BAfoeG) on enrolment rates into higher education by exploiting the exogenous variation introduced through a discrete shift in the repayment regulations. Supported students had to repay the full loan until 1990. Thereafter, 50 percent of the student aid has been offered as a non-repayable grant. Our results from simple difference-in- difference estimates suggest that student aid is ineffective in raising enrolment rates. Our findings may have important implications for the current debate on the reform of financing higher education in Germany and elsewhere.

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Paper provided by EconWPA in its series HEW with number 0410003.

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Length: 28 pages
Date of creation: 06 Oct 2004
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Handle: RePEc:wpa:wuwphe:0410003

Note: Type of Document - pdf; pages: 28
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Web page: http://129.3.20.41

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Related research
Keywords: educational decision; educational finance; higher education; difference-in-difference; discrete-choice;

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Find related papers by JEL classification:
I28 - Health, Education, and Welfare - - Education - - - Government Policy
I22 - Health, Education, and Welfare - - Education - - - Educational Finance
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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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.:
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  2. Michael P. Keane, 2002. "Financial Aid, Borrowing Constraints, and College Attendance: Evidence from Structural Estimates," American Economic Review, American Economic Association, vol. 92(2), pages 293-297, May. [Downloadable!]
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  5. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier. [Downloadable!] (restricted)
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  12. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)
  13. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
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  14. Kodde, David A. & Ritzen, Josef M.M., 1985. "The demand for education under capital market imperfections," European Economic Review, Elsevier, vol. 28(3), pages 347-362, August. [Downloadable!] (restricted)
  15. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September. [Downloadable!] (restricted)
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  16. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
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Cited by:
(explanations, 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. Hans J. Baumgartner & Viktor Steiner, 2006. "Does More Generous Student Aid Increase Enrolment Rates into Higher Education? Evaluating the German Student Aid Reform of 2001," IZA Discussion Papers 2034, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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