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The impact of tuition fees and support on university participation in the UK

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  • Lorraine Dearden

    (Institute for Fiscal Studies and University College London)

  • Emla Fitzsimons

    (Institute for Fiscal Studies and University College London)

  • Gill Wyness

    (Institute for Fiscal Studies)

Abstract

Understanding how policy can affect university participation is important for understanding how governments can promote human capital accumulation. In this paper, we estimate the separate impacts of tuition fees and maintenance grants on the decision to enter university in the UK. We use Labour Force Survey data covering 1992-2007, a period of important variation in higher education finance, which saw the introduction of up-front tuition fees and the abolition of maintenance grants in 1998, followed some eight years later by a shift to higher deferred fees and the reinstatement of maintenance grants. We create a pseudo-panel of university participation of cohorts defined by sex, region of residence and family background, and estimate a number of different specifications on these aggregated data. Our findings show that tuition fees have had a significant negative effect on participation, with a £1,000 increase in fees resulting in a decrease in participation of 3.9 percentage points, which equates to an elasticity of -0.14. Non-repayable support in the form of maintenance grants has had a positive effect on participation, with a £1,000 increase in grants resulting in a 2.6 percentage point increase in participation, which equates to an elasticity of 0.18. These findings are comparable to, but of a slightly lower magnitude than, those in the related US literature.

Suggested Citation

  • Lorraine Dearden & Emla Fitzsimons & Gill Wyness, 2011. "The impact of tuition fees and support on university participation in the UK," IFS Working Papers W11/17, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:11/17
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    References listed on IDEAS

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    Cited by:

    1. Marina Della Giusta & Antonia Fernandez & Sarah Jewell, 2017. "Happy at University? Student Well-being and the Value of Higher Education," Economics Discussion Papers em-dp2017-01, Department of Economics, University of Reading.
    2. Bruckmeier, Kerstin & Wigger, Berthold U., 2014. "The effects of tuition fees on transition from high school to university in Germany," Economics of Education Review, Elsevier, vol. 41(C), pages 14-23.
    3. Arnaud Chevalier & Xiaoxuan Jia, 2016. "Subject-Specific League Tables and Students' Application Decisions," Manchester School, University of Manchester, vol. 84(5), pages 600-620, September.
    4. Matt Dickson, 2013. "The Causal Effect of Education on Wages Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 477-498, August.
    5. Augusto Cerqua & Giorgio Di Pietro, 2017. "Natural disasters and university enrolment: evidence from L’Aquila earthquake," Applied Economics, Taylor & Francis Journals, vol. 49(14), pages 1440-1457, March.
    6. Philip Wales, 2013. "Access All Areas? The Impact of Fees and Background on Student Demand for Postgraduate Higher Education in the UK," SERC Discussion Papers 0128, Centre for Economic Performance, LSE.
    7. Azmat Ghazala & Simion Ştefania, 2021. "Charging for Higher Education: Estimating the Impact on Inequality and Student Outcomes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 175-239, January.
    8. Vettoretto, Elena & Azzolini, Davide & Vergolini, Loris, 2019. "Why should financial aid affect university participation? A review of the literature," SocArXiv jbhy4, Center for Open Science.
    9. Sevilla, Almudena & Borra, Cristina, 2015. "Parental Time Investments in Children: The Role of Competition for University Places in the UK," IZA Discussion Papers 9168, Institute of Labor Economics (IZA).
    10. Sa, Filipa, 2014. "The Effect of Tuition Fees on University Applications and Attendance: Evidence from the UK," IZA Discussion Papers 8364, Institute of Labor Economics (IZA).
    11. Léonard Moulin & David Flacher & Hugo Harari-Kermadec, 2016. "Tuition fees and social segregation: lessons from a natural experiment at the University of Paris 9-Dauphine," Applied Economics, Taylor & Francis Journals, vol. 48(40), pages 3861-3876, August.
    12. José García-Montalvo, 2018. "The Impact of Progressive Tuition Fees on Dropping Out of Higher Education: A Regression Discontinuity Design," Working Papers 1017, Barcelona School of Economics.
    13. John Jerrim & Anna Vignoles & Ross Finnie, 2012. "University access for disadvantaged children: A comparison across English speaking countries," DoQSS Working Papers 12-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    14. Wales, Philip, 2013. "Access all areas? The impact of fees and background on student demand for postgraduate higher education in the UK," LSE Research Online Documents on Economics 57846, London School of Economics and Political Science, LSE Library.
    15. Ghazala Azmat & Ştefania Simion, 2021. "Charging for Higher Education: Estimating the Impact on Inequality and Student Outcomes," Post-Print hal-03873819, HAL.
    16. Oyvat, Cem, 2020. "The role of global finance in the provisioning of social infrastructure and the welfare state," Greenwich Papers in Political Economy 26750, University of Greenwich, Greenwich Political Economy Research Centre.
    17. Young-Hwan Lee & Kwon-Sik Kim & Kwang-Hoon Lee, 2020. "The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities," Sustainability, MDPI, vol. 12(12), pages 1-19, June.
    18. Allan LAWRENCE & Christopher BAMBER & Enis ELEZI, 2017. "E-learning Solutions for a Changing Global Market. An Analysis of Two Comparative Case Studies," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(4), pages 597-618, December.
    19. José Garcia Montalvo, 2018. "The impact of progressive tuition fees on dropping out of higher education: a regression discontinuity design," Economics Working Papers 1597, Department of Economics and Business, Universitat Pompeu Fabra.
    20. Marginson, Simon, 2018. "Global trends in higher education financing: The United Kingdom," International Journal of Educational Development, Elsevier, vol. 58(C), pages 26-36.

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    More about this item

    Keywords

    university participation; higher education funding policies; tuition fees; maintenance grants; pseudo-panel;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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