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Tax Benefits for Graduate Education: Incentives for Whom?

Author

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  • Bednar, Steven

    () (Elon University)

  • Gicheva, Dora

    () (University of North Carolina at Greensboro, Department of Economics)

Abstract

Numerous studies have examined the enrollment responses of traditional undergraduate students to the introduction of government-provided tuition subsidies, but far less attention has been devoted to the elasticity of demand for graduate education. This paper examines how the tax code and government education policies affect graduate enrollment and persistence rates along with the ways in which students fund their graduate education. Our empirical methodology is based on exogenous variations in the availability of an income tax exemption for employer- provided tuition assistance for graduate courses. We find that graduate attendance among full-time workers age 24-30 is higher when the tax exemption is available, mostly due to higher persistence in public universities and vocational course work. The use of employer aid for individuals enrolled in full-time and public part-time graduate programs also increases. We present some evidence that universities may adjust tuition to capture part of the incidence.

Suggested Citation

  • Bednar, Steven & Gicheva, Dora, 2013. "Tax Benefits for Graduate Education: Incentives for Whom?," UNCG Economics Working Papers 13-17, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2013_017
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    References listed on IDEAS

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    Cited by:

    1. Amuedo-Dorantes, Catalina & Sparber, Chad, 2014. "In-state tuition for undocumented immigrants and its impact on college enrollment, tuition costs, student financial aid, and indebtedness," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 11-24.

    More about this item

    Keywords

    Educational Finance; Tax Code; Graduate Education; Employer- Provided Tuition Subsidies;

    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
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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