EconStor >
Verein für Socialpolitik >
Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie >

Please use this identifier to cite or link to this item:
Title:Expected Future Earnings, Taxation, and University Enrollment: A Microeconometric Model with Uncertainty PDF Logo
Authors:Glocker, Daniela
Fossen, Frank M.
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Education, Taxation and the Labor Market A10-V1
Abstract:Taxation changes the expectations of prospective university students about their future level and uncertainty of after-tax income. To estimate the impact of taxes on university enrollment, we estimate a structural microeconometric model, in which a high-school graduate decides to enter university studies if expected lifetime utility from this choice is greater than that anticipated from starting to work right away. We estimate the ex-ante future paths of the expectation and variance of after-tax income for German high-school graduates, accounting for nonrandom selection. The enrollment model takes into account university dropout and unemployment risks. Consistently with expectations, the estimation results indicate that higher expected returns to an academic education increase the probability of university enrollment, whereas higher uncertainty among academics decreases enrollment rates. A simulation based on the estimated model indicates that a revenue-neutral, flat-rate tax reform with an unchanged basic tax allowance would increase enrollment rates for men in Germany.
Subjects:University Enrollment
Income Taxation
Flat Tax
Income Risk
Risk Aversion
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

Files in This Item:
File Description SizeFormat
VfS_2010_pid_678.pdf288.83 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.