November 2014

IZA DP No. 8623: Did Tuition Fees in Germany Constrain Students' Budgets? New Evidence from a Natural Experiment

revised version published in: IZA Journal or European Labor Studies, 2016, 5:6,

Less than a decade ago, several German states introduced tuition fees for university education. Despite their comparatively low level, fees were perceived by the public to increase social injustice, and have been abolished. Whereas other studies have shown no effect on enrollment, we analyze the effects on students' budgets. To identify causal effects, we exploited the natural experiment established by the introduction of fees. They did not affect students' spending behavior independently of social background, but females experienced a small negative effect. Effects on other outcomes indicate that students increased their budgets only marginally; fees did not increase social inequality.