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Centre for the Economics of Education (NJ1)

Understanding how policy can affect university education is important for understanding how governments can promote human capital accumulation. This paper exploits historic changes to university funding policies in the UK to estimate the impact of tuition fees and maintenance grants on university participation. Previous work on this, which largely relates to the US, considers either the effect of fees or the effect of support, but not both in the same setting; moreover it considers specific sub-samples of individuals. In this paper on the other hand, the authors benchmark the effects of both grants and fees, and furthermore, they do this on a representative sample of individuals. Using a pseudo panel data set constructed from 16 years of data on first-year university participation, their results suggest an important role for tuition fees and grants in university participation decisions: they find robust evidence that a 1,000 British pounds increase in tuition fees reduces university participation by 3.9 percentage points, while a 1,000 British pounds increase in maintenance grants increases participation by 2.6 percentage points. These figures equate to an elasticity of -0.14 for fees and 0.18 for grants. These results are in line with those estimated in the US in a number of studies, such as Kane (1995), Dynarski (2003) and Hemelt and Marcotte (2008). Probability of university participation at age 18-19 is appended. (Contains 8 tables, 5 figures and 34 footnotes.)

Descriptors: Tuition, Foreign Countries, Higher Education, Grants, College Attendance, College Freshmen, Fees, Role, Finance Reform, Educational Finance, Student Costs, Evidence, Financial Policy, Benchmarking, Statistical Data, Statistical Analysis, Sampling, Educational History, Family Income, Student Loan Programs, Eligibility

Centre for the Economics of Education. London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, UK. Tel: +44-20-7955-7673; Fax: +44-20-7955-7595; e-mail: cee[at]; Web site:

Autor: Dearden, Lorraine; Fitzsimons, Emla; Wyness, Gill


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