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Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform

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  • Helena Skyt Nielsen
  • Torben Sørensen
  • Christopher Taber

Abstract

In this paper, we estimate the response of college enrollment to changes in student aid arising from a Danish reform. We separately identify the effect of aid from that of other observed and unobserved variables such as parental income. We exploit the combination of a kinked aid scheme and a reform to identify the effect of direct costs on enrollment. To allow for potential biases due to borrowing constraints, we use detailed information on parents' assets. We find that enrollment is less responsive than found in other studies and that borrowing constraints only deter college enrollment to a minor extent. (JEL H52, I22, I23)

Suggested Citation

  • Helena Skyt Nielsen & Torben Sørensen & 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.
  • Handle: RePEc:aea:aejpol:v:2:y:2010:i:2:p:185-215
    Note: DOI: 10.1257/pol.2.2.185
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    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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    1. Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform (American Economic Journal: Economic Policy 2010) in ReplicationWiki

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