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Tax Preferences for Higher Education and Adult College Enrollment

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Abstract

The federal government delivers substantial college aid through the tax code, after introducing education tax credits in 1998 and a tuition deduction in 2002. The design of the Lifetime Learning tax credit and the tuition deduction may make them particularly useful to older students. This paper investigates how these provisions have affected college attendance of individuals in their 30s and 40s. For most adults, there is no effect on college attendance. Among men whose 1998 educational attainment falls short of earlylife educational expectations, eligibility for an education tax preference is associated with a 2.5 to 3.4 percentage point increase in the probability of college attendance.

Suggested Citation

  • Sara LaLumia, 2010. "Tax Preferences for Higher Education and Adult College Enrollment," Department of Economics Working Papers 2010-09, Department of Economics, Williams College.
  • Handle: RePEc:wil:wileco:2010-09
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    File URL: http://web.williams.edu/Economics/wp/LaLumiaEducationTaxCredits.pdf
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    References listed on IDEAS

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    1. Neil S. Seftor & NSarah E. Turner, 2002. "Back to School: Federal Student Aid Policy and Adult College Enrollment," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 336-352.
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    5. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    6. Bridget Terry Long, 2003. "The Impact of Federal Tax Credits for Higher Education Expenses," NBER Working Papers 9553, National Bureau of Economic Research, Inc.
    7. Audrey Light, 1995. "The Effects of Interrupted Schooling on Wages," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 472-502.
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    Cited by:

    1. George B. Bulman & Caroline M. Hoxby, 2015. "The Returns to the Federal Tax Credits for Higher Education," Tax Policy and the Economy, University of Chicago Press, vol. 29(1), pages 13-88.
    2. Schwerdt, Guido & Messer, Dolores & Woessmann, Ludger & Wolter, Stefan C., 2012. "The impact of an adult education voucher program: Evidence from a randomized field experiment," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 569-583.
    3. Turner, Nick, 2010. "Why Don’t Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertial in Program Selection," University of California at San Diego, Economics Working Paper Series qt0pb3f440, Department of Economics, UC San Diego.
    4. Elsayed, Mahmoud A.A., 2016. "The Impact of Education Tax Benefits on College Completion," Economics of Education Review, Elsevier, vol. 53(C), pages 16-30.
    5. Bednar, Steven & Gicheva, Dora, 2013. "Tax benefits for graduate education: Incentives for whom?," Economics of Education Review, Elsevier, vol. 36(C), pages 181-197.
    6. Bergman, Peter & Denning, Jeffrey T. & Manoli, Dayanand, 2017. "Broken Tax Breaks? Evidence from a Tax Credit Information Experiment with 1,000,000 Students," IZA Discussion Papers 10997, Institute for the Study of Labor (IZA).
    7. Susan Dynarski & Judith Scott-Clayton, 2016. "Tax Benefits for College Attendance," NBER Working Papers 22127, National Bureau of Economic Research, Inc.
    8. Turner, Nicholas, 2011. "The Effect of Tax-Based Federal Student Aid on College Enrollment," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(3), pages 839-861, September.
    9. Turner Nicholas, 2011. "Why Don't Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertia in Program Selection," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-24, December.

    More about this item

    Keywords

    college finance; education tax credits; and college enrollment;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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