The Impact of Tuition Fees and Support on University Participation in the UK

Lorraine Dearden (), Emla Fitzsimons and Gill Wyness

CEE Discussion Papers from Centre for the Economics of Education, LSE

Abstract: Understanding how policy can affect university participation is important for understanding how governments can promote human capital accumulation. In this paper, we estimate the separate impacts of tuition fees and maintenance grants on the decision to enter university in the UK. We use Labour Force Survey data covering 1992-2007, a period of important variation in higher education finance, which saw the introduction of up-front tuition fees and the abolition of maintenance grants in 1998, followed some eight years later by a shift to higher deferred fees and the reinstatement of maintenance grants. We create a pseudo-panel of university participation of cohorts defined by sex, region of residence and family background, and estimate a number of different specifications on these aggregated data. Our findings show that tuition fees have had a significant negative effect on participation, with a £1,000 increase in fees resulting in a decrease in participation of 3.9 percentage points, which equates to an elasticity of -0.14. Non-repayable support in the form of maintenance grants has had a positive effect on participation, with a £1,000 increase in grants resulting in a 2.6 percentage point increase in participation, which equates to an elasticity of 0.18. These findings are comparable to, but of a slightly lower magnitude than, those in the related US literature.

Keywords: university participation; higher education funding policies; tuition fees; maintenance grants; pseudo-panel (search for similar items in EconPapers)
JEL-codes: I21 I22 I28 (search for similar items in EconPapers)
Date: 2011-07
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: View citations in EconPapers (26)

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Working Paper: The impact of tuition fees and support on university participation in the UK (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:ceedps:0126

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