IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/88680.html
   My bibliography  Save this paper

Higher education funding reforms: a comprehensive analysis of educational and labour market outcomes in England

Author

Listed:
  • Azmat, Ghazala
  • Simion, Stefania

Abstract

This paper investigates the impact of changes in the funding of higher education in England on students’ choices and outcomes. Over the last two decades – through three major reforms in 1998, 2006 and 2012 – undergraduate university education in public universities moved from being free to students and state funded to charging substantial tuition fees to all students. This was done in conjunction with the government offering generous means-tested maintenance grants and loans. Using detailed longitudinal micro-data that follows all students attending state schools in England (more than 90 percent of all schoolaged children) from lower education to higher education, we document the socio-economic distributional effects of the 2006 and 2012 policy reforms on a comprehensive set of outcomes, including enrolment, relocation decisions, selection of institution, program of study, and performance within university. For a subset of students, we track them after completing higher education, allowing us to study the labour market effects of the policy reforms. Despite the substantial higher education funding reforms, we do not find large aggregate effect on student enrolment or on other margins. Moreover, the small negative impacts found on enrolment were largely borne on those in higher parts of the wealth distribution – reducing the enrolment gap across socioeconomic groups.

Suggested Citation

  • Azmat, Ghazala & Simion, Stefania, 2018. "Higher education funding reforms: a comprehensive analysis of educational and labour market outcomes in England," LSE Research Online Documents on Economics 88680, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:88680
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/88680/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bas Jacobs & Sweder J. G. van Wijnbergen, 2007. "Capital-Market Failure, Adverse Selection, and Equity Financing of Higher Education," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 1-32, March.
    2. Thomas J. Kane, 1995. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?," NBER Working Papers 5164, National Bureau of Economic Research, Inc.
    3. Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 271-296.
    4. Hübner, Malte, 2012. "Do tuition fees affect enrollment behavior? Evidence from a ‘natural experiment’ in Germany," Economics of Education Review, Elsevier, vol. 31(6), pages 949-960.
    5. Philip Oreopoulos & Daniel Lang & Joshua Angrist, 2009. "Incentives and Services for College Achievement: Evidence from a Randomized Trial," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 136-163, January.
    6. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jo Blanden & Matthias Doepke & Jan Stuhler, 2022. "Education inequality," CEP Discussion Papers dp1849, Centre for Economic Performance, LSE.
    2. Britton, Jack & Gruber, Jonathan, 2020. "Do income contingent student loans reduce labor supply?," Economics of Education Review, Elsevier, vol. 79(C).
    3. Antonio Cabrales & Maia Güell & Rocio Madera & Analía Viola, 2019. "Income contingent university loans: Policy design and an application to Spain," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(99), pages 479-521.
    4. Alexandre de Gendre & Jan Kabátek, 2021. "From subsidies to loans: The effects of a national student finance reform on the choices of secondary school students," Melbourne Institute Working Paper Series wp2021n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    5. Murphy, Richard & Scott-Clayton, Judith & Wyness, Gill, 2019. "The end of free college in England: Implications for enrolments, equity, and quality," Economics of Education Review, Elsevier, vol. 71(C), pages 7-22.
    6. Molina, Teresa & Rivadeneyra, Ivan, 2021. "The schooling and labor market effects of eliminating university tuition in Ecuador," Journal of Public Economics, Elsevier, vol. 196(C).
    7. Bradley, Steve & Migali, Giuseppe, 2019. "The effects of the 2006 tuition fee reform and the Great Recession on university student dropout behaviour in the UK," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 331-356.
    8. Hassani-Nezhad, Lena & Anderberg, Dan & Chevalier, Arnaud & Lührmann, Melanie & Pavan, Ronni, 2021. "Higher education financing and the educational aspirations of teenagers and their parents," Economics of Education Review, Elsevier, vol. 85(C).
    9. Oyvat, Cem, 2020. "The role of global finance in the provisioning of social infrastructure and the welfare state," Greenwich Papers in Political Economy 26750, University of Greenwich, Greenwich Political Economy Research Centre.
    10. Ghazala Azmat & Richard Murphy & Anna Valero & Gill Wyness, 2018. "Universities and industrial strategy in the UK: review of evidence and implications for policy," CEP Industrial Strategy 06, Centre for Economic Performance, LSE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Azmat Ghazala & Simion Ştefania, 2021. "Charging for Higher Education: Estimating the Impact on Inequality and Student Outcomes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 175-239, January.
    2. Mira Fischer & Patrick Kampkötter, 2017. "Effects of German Universities' Excellence Initiative on Ability Sorting of Students and Perceptions of Educational Quality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(4), pages 662-687, December.
    3. Celeste K. Carruthers & Jilleah G. Welch, 2015. "Not Whether, but Where? Pell Grants and College Choices," Working Papers 2015-04, University of Tennessee, Department of Economics, revised 28 Sep 2015.
    4. David Deming & Susan Dynarski, 2009. "Into College, Out of Poverty? Policies to Increase the Postsecondary Attainment of the Poor," NBER Working Papers 15387, National Bureau of Economic Research, Inc.
    5. Charles T. Clotfelter & Steven W. Hemelt & Helen F. Ladd, 2018. "Multifaceted Aid For Low‐Income Students And College Outcomes: Evidence From North Carolina," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 278-303, January.
    6. Benjamin T. Skinner, 2019. "Choosing College in the 2000s: An Updated Analysis Using the Conditional Logistic Choice Model," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(2), pages 153-183, March.
    7. Bas Jacobs & Hongyan Yang, 2013. "Second-Best Income Taxation with Endogenous Human Capital and Borrowing Constraints," CESifo Working Paper Series 4155, CESifo.
    8. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    9. Bietenbeck, Jan & Leibing, Andreas & Marcus, Jan & Weinhardt, Felix, 2023. "Tuition fees and educational attainment," European Economic Review, Elsevier, vol. 154(C).
    10. Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," NBER Chapters, in: Income Taxation, Trans-Atlantic Public Economics Seminar (TAPES), pages 185-215, National Bureau of Economic Research, Inc.
    11. Bridget Terry Long, 2004. "Does the Format of a Financial Aid Program Matter? The Effect of State In-Kind Tuition Subsidies," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 767-782, August.
    12. Augusto Cerqua & Giorgio Di Pietro, 2017. "Natural disasters and university enrolment: evidence from L’Aquila earthquake," Applied Economics, Taylor & Francis Journals, vol. 49(14), pages 1440-1457, March.
    13. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    14. Verboven, Frank & Kelchtermans, Stijn, 2006. "Participation and Schooling in a Public System of Higher Education," CEPR Discussion Papers 5690, C.E.P.R. Discussion Papers.
    15. Ding, Lan & Li, Haizheng, 2012. "Social networks and study abroad — The case of Chinese visiting students in the US," China Economic Review, Elsevier, vol. 23(3), pages 580-589.
    16. Daniele Bondonio & Fabio Berton, 2018. "The Impact of Degree Duration on Higher Education Participation: Evidence from a Large‐scale Natural Experiment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(5), pages 905-930, October.
    17. José Montalbán, 2019. "Countering moral hazard in higher education: The role of performance incentives in need-based grants," PSE Working Papers halshs-02160365, HAL.
    18. Anderson, Drew M., 2020. "When financial aid is scarce: The challenge of allocating college aid where it is needed most," Journal of Public Economics, Elsevier, vol. 190(C).
    19. Semjén, András, 2012. "A tandíj közgazdaságtana [The economics of tuition fees]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 31-62.
    20. Erik Canton & A. Blom, 2004. "Do student loans improve accessibility to higher education and student performance? An impact study of the SOFES program in Mexico," CPB Discussion Paper 33, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    Keywords

    Higher education; tuition fees; means-tested support; career choices; career outcomes;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I29 - Health, Education, and Welfare - - Education - - - Other
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:88680. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.