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American Economic Journal: Economic Policy: Vol. 2 No. 2 (May 2010)

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

Article Citation

Nielsen, Helena Skyt, Torben Sørensen, and Christopher Taber. 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform." American Economic Journal: Economic Policy, 2(2): 185-215.

DOI: 10.1257/pol.2.2.185

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)

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Authors

Nielsen, Helena Skyt (Aarhus U and IZA, Bonn)
Sørensen, Torben (Aarhus U)
Taber, Christopher (U WI)

JEL Classifications

H52: National Government Expenditures and Education
I22: Educational Finance
I23: Higher Education and Research Institutions

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