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Enrolments in higher education in West Germany: the impact of social background, labour market returns and educational funding

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  • Lauer, Charlotte
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    Abstract

    This paper analyses the determinants of participation in higher education in West Germany. In particular, the role of social origin as well as of expectations regarding the labour market outcome of a higher education degree and of public educational policy are examined. The estimations are based on a model of utility maximisation, where the decision to enrol in one of several educational tracks of different levels is determined by the expected ratio of marginal cost to marginal return for the different enrolment alternatives given some observed characteristics. The model is estimated empirically on the basis of GSOEP and regional data. The results show that the probability of enrolment in higher education is mainly influenced by social origin. Parental education and occupational position, in particular, are essential. However, the enrolment probability also depends on labour market return expectations. In particular, the absolute level of the personal unemployment risk, rather than the reduction of the unemployment risk to be expected from higher education, is a strong incentive to pursue higher education. The expected return to education in terms of wages also affects educational decisions significantly. A higher propensity to be out of work or employed part-time proved to go along with a lower probability of being enrolled in higher education significantly. Also public policy is found to have an influence on enrolments. In particular, extending the coverage of public financial support in the form of BAföG seems to be more efficient in increasing enrolments than increasing the amount of BAföG granted. The extent of the repayable part of the financial aid has a dampening, though limited, influence on enrolments. --

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    Bibliographic Info

    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 00-59.

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    Date of creation: 2000
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    Handle: RePEc:zbw:zewdip:5343

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    Keywords: educational decisions; costs of education; returns to education;

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    References

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    1. Ira N. Gang & Klaus F. Zimmermann, 2000. "Is Child like Parent? Educational Attainment and Ethnic Origin," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 550-569.
    2. Manski, C.F. & Sandefur, G.D. & Mclanahan, S. & Powers, D., 1990. "Alternative Estimates Of The Effect Of Family Stucture During Adolescence On Hight School Graduation," Working papers, Wisconsin Madison - Social Systems 90-31, Wisconsin Madison - Social Systems.
    3. Dominique GOUX & Éric MAURIN, 2001. "La mobilité sociale et son évolution : le rôle des anticipations réexaminé," Annales d'Economie et de Statistique, ENSAE, issue 62, pages 71-96.
    4. Giannelli, Gianna Claudia & Monfardini, Chiara, 2000. "Joint Decisions on Household Membership and Human Capital Accumulation of Youths - The role of expected earnings and local markets," IZA Discussion Papers 191, Institute for the Study of Labor (IZA).
    5. Merz, M. & Schimmelpfenning, A., 1999. "Career Choices of German High School Graduates: Evidence from the German Socio-Economic Panel," Economics Working Papers, European University Institute eco99/11, European University Institute.
    6. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, American Economic Association, vol. 82(3), pages 393-408, June.
    7. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
    8. Kathryn Wilson & Barbara Wolfe & Robert Haveman, 2005. "The Role of Expectations in Adolescent Schooling Choices: Do Youths Respond to Economic Incentives?," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 43(3), pages 467-492, July.
    9. Hilmer, Michael J., 1998. "Post-secondary fees and the decision to attend a university or a community college," Journal of Public Economics, Elsevier, Elsevier, vol. 67(3), pages 329-348, March.
    10. Stephen Cameron & Christopher Taber, 2000. "Borrowing Constraints and the Returns to Schooling," NBER Working Papers 7761, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Elena Casquel & Ezequiel Uriel Jiménez, 2007. "The Effects Of Labor Market Conditions And Family Backgrounds On Education Attainment Of Spanish Youngsters," Working Papers. Serie EC, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 2007-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. Hermann, Zoltán, 2005. "A helyi munkaerőpiac hatása a középfokú továbbtanulási döntésekre
      [The local labour markets effect on decisions to enter secondary-level education]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 39-60.
    3. Schmidtchen, Dieter & Kirstein, Roland, 2005. "Mehr Markt im Hochschulbereich: Zur Effizienz und Gerechtigkeit von Studiengebühren," CSLE Discussion Paper Series 2005-01, Saarland University, CSLE - Center for the Study of Law and Economics.
    4. Varga, Júlia, 2001. "A kereseti várakozások hatása az érettségizők továbbtanulási döntésére
      [The effects of earning expectations on the decisions of school leavers about further study]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 615-639.
    5. Wolter, Stefan C. & Zbinden, André, 2001. "Rates of Return to Education: The View of Students in Switzerland," IZA Discussion Papers 371, Institute for the Study of Labor (IZA).
    6. Roland Amann, 2004. "Policies in Tertiary Education and the Change in Attendance and Time-to-Degree," Working Papers of the Research Group Heterogenous Labor, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim 04-18, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.

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