The effect of rental prices on student mobility

Merve Betül Gökçe

MPRA Paper from University Library of Munich, Germany

Abstract: Between 2020 and 2023, Turkey experienced a significant rise in housing prices, with inflation-adjusted rents more than doubled in some regions, marking it a standout case of global house price inflation. This study exploits the regional and temporal variation in rental prices as a natural experiment. It employs a difference-in-differences framework to explore the impact on students’ educational mobility within a developing country, where annually, one million high school graduates face the critical decision to stay local or relocate to another province for university education. Using a comprehensive panel dataset covering all higher education programs in Turkey, combined with rental price indices for all 81 provinces, the analysis reveals that rising rental prices significantly reduce inter-provincial student mobility. A 100 TL increase in rental prices (adjusted to 2023 levels) reduces the openness rate (out-of-province enrollment) of public university programs by 3.5 percentage points (a 4.4% relative decline). The negative effect is concentrated in programs with lower entry scores, where the openness rate declines by 18%, while high-entry-score programs remain unaffected. This heterogeneity across program competitiveness suggests that rising accommodation expenses disproportionately restrict the geographical mobility of students with lower academic performance. The analysis of private university programs further supports this conclusion, showing that rental price increases significantly reduce mobility in tuition-based programs while leaving full-scholarship programs, typically attended by high-scoring students, unaffected.

Keywords: Student mobility; educational migration; rental price; housing shock; accommodation cost. (search for similar items in EconPapers)
JEL-codes: I23 J61 R31 (search for similar items in EconPapers)
Date: 2024-11-30
New Economics Papers: this item is included in nep-ara, nep-mig and nep-ure
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