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

38 Pages Posted: 10 Dec 2008 Last revised: 19 Sep 2022

See all articles by Helena Skyt Nielsen

Helena Skyt Nielsen

Aarhus University - Department of Economics and Business Economics; IZA Institute of Labor Economics

Christopher Taber

National Bureau of Economic Research (NBER); University of Wisconsin - Madison

Torben Soerensen

Aarhus University

Multiple version iconThere are 3 versions of this paper

Date Written: December 2008

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

Nielsen, Helena Skyt and Taber, Christopher R. and Soerensen, Torben, Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform (December 2008). NBER Working Paper No. w14535, Available at SSRN: https://ssrn.com/abstract=1314382

Helena Skyt Nielsen

Aarhus University - Department of Economics and Business Economics ( email )

Fuglesangs Alle 4
Aarhus, 8210
Denmark

HOME PAGE: http://person.au.dk/hnielsen@econ.au.dk

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Christopher R. Taber (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

Torben Soerensen

Aarhus University ( email )

Nordre Ringgade 1
DK-8000 Aarhus C, 8000
Denmark