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

Author

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  • Helena Skyt Nielsen
  • Torben Sørensen
  • Christopher Taber

    (School of Economics and Management, University of Aarhus, Denmark)

Abstract

In this paper, we investigate the responsiveness of the demand for college 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 of the student aid scheme to identify the effect of direct costs on college enrollment. To allow for heterogeneous responses 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 the presence of borrowing constraints only deters college enrollment to a minor extent.

Suggested Citation

  • Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2008. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," Economics Working Papers 2008-14, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2008-14
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    References listed on IDEAS

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    More about this item

    Keywords

    college attendance; educational subsidies; reform; kink regression;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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