Fostering Educational Enrolment Through Subsidies: The Issue of Timing
Mario Fiorini
No 157, Working Paper Series from Finance Discipline Group, UTS Business School, University of Technology, Sydney
Abstract:
In this paper we build a dynamic structural model of educational choices in which cognitive skills shape decisions. The model is estimated by maximum likelihood using cohort data where individuals are observed from birth onwards. These data are unique in that they include cognitive skills test scores collected as early as age 7. We then simulate the e?ect of two educational subsidies equal in cost but different in the timing of disbursement. The ?rst consists of grants assigned directly to individuals aged between 16 and 18. The second is assigned to the parents earlier on, when the cohort is still in its childhood. The latter subsidy affects cognitive skills accumulation and in turn educational choices. Our results suggest that a direct grant in the form of a tuition subsidy might be more efficient even in the absence of short term ?nancial constraints. Although cognitive skills accumulated during childhood play a key role in the educational decisions, an unconditional ?nancial subsidy to parents is not the best policy. The results do not call a halt to investments in cognitive skill accumulation during childhood, but recommend that such investments should be well structured and ensure a high return.
Keywords: educational decisions; dynamic structural estimation; tuition subsidy; parental income subsidy (search for similar items in EconPapers)
JEL-codes: I21 I28 J24 J31 (search for similar items in EconPapers)
Pages: 32
Date: 2008-05-01
New Economics Papers: this item is included in nep-edu and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:
Published as: Fiorini, M., 2012, "Fostering Educational Enrolment Through Subsidies: The Issue of Timing", Journal of Applied Econometrics, 27(5), 741-772.
Downloads: (external link)
http://www.finance.uts.edu.au/research/wpapers/wp157.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.finance.uts.edu.au:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)
Related works:
Working Paper: Fostering Educational Enrolment Through Subsidies: the Issue of Timing (2007) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:uts:wpaper:157
Access Statistics for this paper
More papers in Working Paper Series from Finance Discipline Group, UTS Business School, University of Technology, Sydney PO Box 123, Broadway, NSW 2007, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Duncan Ford ().