Christoph Winter. Accounting for the Changing Role of Family Income in Determining College Entry.

Christoph Winter. Accounting for the Changing Role of Family Income in Determining College Entry.


This paper analyzes the determinants of college enrolment and their changes over time. I propose a quantitative life cycle model with college enrolment. Altruistic parents provide nancial support to their o spring. Using counterfactual experiments, I nd that 24 percent of all households are nancially constrained in their college decision. Constraints became more severe over time.
I show that my model is consistent with a narrow college enrolment gap between students from rich and poor families previously reported in the empirical literature.
Estimating enrolment gaps is a popular reduced-form approach for measuring the fraction of constrained households. My results suggest that these reduced-form estimates are misleading and that a structural model of parental transfers is needed to correctly identify constrained households. Parental transfers are also shown to be an important driver behind the changing role of family income as a determinant of college entry, a fact which is well-documented for the U.S. economy



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Keywords: Economics of education

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