How tuition fees affected student enrollment at higher education institutions: the aftermath of a German quasi-experiment

Abstract

AbstractThis study examines the impact of the charging of tuition fees between 2006 and 2014 in several German federal states on the number of first-year student enrollments. Since Germany is known for a tuition-free education policy at public institutions, the fundamental question arises of whether, and if so, to what extent, the temporary tuitions influenced the number of first-year-student enrollments. In this regard, Becker’s human capital theory suggests that rising fees should be associated with declining enrollment rates. The analyses to test the hypothesis are based on a longitudinal administrative panel data set for 206 universities and universities of applied sciences from 2003 to 2018; this means there are 3296 observations before, during, and after the tuition treatment. While no previous study has covered the full period of the policy or undertook more aggregate-level analyses, this study applies an analytical research design that uses several panel-data models and robustness checks to examine causal relations based on a quasi-experimental setting. The results of Fixed effects regressions confirm the hypothesized negative impact and even reveal a persistent negative effect of the treatment. The comparison of higher education institutions with and without tuition fees shows that the former institutions lost approximately between 3.8 and 7 percent of their first-year student enrollments on average.