The decision to enrol in higher education

Dominik Hügle

No 2021/8, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: In this paper, I analyze how the higher education decision of young adults in Germany depends on their expected future earnings. For this, I estimate a microeconometric model in which individuals maximize life-time utility by choosing whether or not to enter higher education. To forecast individual life cycles in terms of employment, earnings, and family formation under higher education and its alternative, vocational training, I use a dynamic microsimulation model and regression techniques. I take into account that while individuals generally choose between two options, higher education and vocational training, they are aware of multiple potential realizations under both options, such as leaving higher education with a bachelor degree or taking up higher education after first having earned a vocational degree. Using the estimates from the decision model, I simulate the introduction of different tuition fee and graduate tax scenarios. I find that the impact of these education policies on the higher education decision is limited and only few individuals would change their educational decisions as a reaction to these policies.

Keywords: Educational choice; Higher education; Dynamic microsimulation (search for similar items in EconPapers)
JEL-codes: C53 I23 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cmp, nep-edu and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/233064/1/1753938864.pdf (application/pdf)

Related works:
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:zbw:fubsbe:20218

DOI: 10.17169/refubium-29947

Access Statistics for this paper

More papers in Discussion Papers from Free University Berlin, School of Business & Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().