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Source: Federal Reserve Bank of New York
Resulting in 1 citation.
1. Sahin, Aysegul
Incentive Effects of Higher Education Subsidies on Student Effort
Staff Reports No. 192, Federal Reserve Bank of New York, 2004.
Also: http://www.ny.frb.org/research/staff_reports/sr192.html
Cohort(s): NLSY79
Publisher: Federal Reserve Bank of New York
Keyword(s): College Enrollment; Colleges; Cost-Benefit Studies; Human Capital; Modeling; Tuition

Permission to reprint the abstract has not been received from the publisher.

This paper uses a game-theoretic model to analyze the disincentive effects of low-tuition policies on student effort. The model of parent and student responses to tuition subsidies is then calibrated using information from the National Longitudinal Survey of Youth 1979 and the High School and Beyond Sophomore Cohort: 1980-92. I find that although subsidizing tuition increases enrollment rates, it reduces student effort. This follows from the fact that a high-subsidy, low-tuition policy causes an increase in the percentage of less able and less highly motivated college graduates. Additionally--and potentially more important--all students, even the more highly motivated ones, respond to lower tuition levels by decreasing their effort levels. This study adds to the literature on the enrollment effects of low-tuition policies by demonstrating how high-subsidy, low-tuition policies have both disincentive effects on students' study time and adverse effects on human capital accumulation
Bibliography Citation
Sahin, Aysegul. "Incentive Effects of Higher Education Subsidies on Student Effort." Staff Reports No. 192, Federal Reserve Bank of New York, 2004.